BG - NYSE

Good day, and welcome to the Bunge Global S.A. Fourth Quarter 2024 Earnings Release and Conference Call. [Operator Instructions] Please note that today's event is being recorded. I would now like to turn the conference over to Ruth Ann Wisener. Please go ahead.

Thank you, operator, and thank you for joining us this morning for our fourth quarter earnings call. Before we get started, I want to let you know that we have slides to accompany our discussion. These can be found at the Investor Center on our website at bunge.com under Events and Presentations. Reconciliations of our non-GAAP measures to the most directly comparable GAAP financial measure are posted on our website as well. I'd like to direct you to Slide 2 and remind you that today's presentation includes forward-looking statements that reflect Bunge's current view with respect to future events, financial performance and industry conditions. These forward-looking statements are subject to various risks and uncertainties. Bunge has provided additional information in its reports on file with the SEC concerning factors that could cause actual results to differ materially from those contained in this presentation, and we encourage you to review these factors. On the call this morning are Greg Heckman, Bunge's Chief Executive Officer; and John Neppl, Chief Financial Officer. I'll now turn the call over to Greg.

Thank you, Ruth Ann Wisener, and good morning, everyone. I'll start by thanking the team for their continued hard work and commitment in 2024. We made good progress on a number of significant growth projects while also advancing our work to build an even stronger Bunge Limited. Our team is prepared for the close of our business combination with Viterra. Teams at both companies have put in countless hours of planning to ensure a smooth integration so that our customers at both ends of the value chain, farmers and consumers, see good continuity of service. And we expect to close the transaction soon. You likely heard we received regulatory approval from the Canadian government last month. We continue to engage in constructive conversations with regulatory authorities in China while we work through the final stages of the asset divestment process in Europe. Also in the late stage of the regulatory process for our acquisition of CJ Selecta, a leading manufacturer and exporter of soy protein concentrate in Brazil. We expect that transaction to close in the near future. In the coming weeks, we expect to close our announced partnership to develop new opportunities to help meet the growing demand for lower carbon intensity feedstocks for the production of renewable fuels. This alliance is the first of its kind in Europe and furthers our long-term strategy to create alternative paths towards the decarbonization of agriculture and the role we can play in the liquid fuel supply chain. In October, we announced the completion of the sale of our sugar and bioenergy joint venture in Brazil to BP. As we've discussed, this streamlines our business and allowed us to expand our stock repurchases authorization. Getting ready for these large initiatives takes teamwork and cross-functional collaboration. The team has done a great job of running our day-to-day business while also working on these strategic growth initiatives. In addition, we continue to return capital to shareholders through our share repurchases and our regular dividend. We repurchased a total of $1.1 billion of shares in 2024, and share buybacks will continue to be an important part of our capital allocation strategy. Shifting to our operating results, we didn't close the year as expected. Particular operating conditions have been challenging in South America, and they continue to be in the fourth quarter. Fortunately, we're seeing things stabilize and expect to see improvement. After the Viterra transaction closes, we expect to provide an outlook for the combined company. In the meantime, we are providing an outlook for the current Bunge Limited business. Forward visibility is limited, particularly at this point given the increased geopolitical uncertainty. Based on what we see in the markets and the forward curves today, we currently expect full-year adjusted EPS to be approximately $7.75. With that, I'll turn it over to John Neppl for a deeper look at our financials and outlook.

Thanks, Greg, and good morning, everyone. As Greg mentioned, the fourth quarter came in below our expectations. This was particularly true in South America, where the market environment has been challenging all year, impacting industry margins throughout the oilseed and grain value chains, including those of our joint ventures. We also felt the impact of a declining margin environment in North America from biofuel rate uncertainty. Now let's turn to the earnings highlights on Slide five. Reported fourth-quarter earnings per share was $4.36 compared to $4.18 in the fourth quarter of 2023. Reported results included a favorable mark-to-market timing difference of $1.25 per share and a net positive impact of $0.98 per share. Notable items were primarily related to the gain on the sale of our Sugar and Bioenergy joint venture, partially offset by transaction and integration costs associated with Viterra. Adjusted EPS was $2.13 in the fourth quarter, compared to $3.70 in the prior year. Adjusted core segment earnings before interest and taxes, or EBIT, was $548 million in the quarter, inclusive of the Ukraine business interruption insurance recovery of $52 million, versus EBIT of $881 million last year. In processing, strong results in Europe and Asia were offset by lower results in North America and South America, as well as in European softseeds. Higher merchandising results were driven by improved performance in Finance Services, Freight, and Global Grains, offsetting lower results in Global Refined and Specialty Oils. Lower results in North America were primarily due to the combination of a more balanced supply and demand environment and uncertainty related to U.S. biofuel policy. Results in Europe, South America, and Asia were also down due to lower margins, though the variances were much narrower. In milling, higher results in North America were more than offset by lower results in South America. The corporate and other increase in corporate expenses was primarily driven by lower performance-based compensation and various project-related expenses in the prior year. Other results related to our captive insurance and securitization programs and Bunge Ventures. Core results and non-core reflect only one month of income from the Sugar joint venture due to the recent close on the sale. Net interest expense of $62 million was down in the quarter compared to last year, reflecting lower net debt levels and interest rates. The increase in income tax expense for both the quarter and full year was primarily due to lower pretax income and earnings. Adjusting for notable items and mark-to-market timing differences, the full-year adjusted effective income tax rate was approximately 23% for the current and prior year. Let's turn to Slide six, where you can see our adjusted EPS and EBIT over the past five years. Strong performance during this period reflects a combination of a favorable market environment and excellent execution by our team. The recent trend indicates a more balanced supply and demand, translating into less volatility and lower margins. Slide seven details our capital allocation. For the full year, we generated approximately $1.7 billion of adjusted funds from operations. After allocating $451 million to sustaining CapEx, which includes maintenance, environmental health, and safety, we had approximately $1.2 billion of discretionary cash flow available. Of this amount, we paid $378 million in dividends, approximately $925 million in growth and productivity-related CapEx, two-thirds of which related to our growth pipeline of large multiyear investments, and repurchased $1.1 billion of Bunge Limited shares. $500 million of those repurchases were from the $728 million of cash proceeds received to date for the sale of our Sugar JV. This resulted in the use of $444 million of previously retained cash flow. Moving to Slide eight, we finished 2024 with a total CapEx spend of approximately $1.4 billion, which was in line with our last forecast. As we head into 2025, we expect CapEx to be in the range of $1.5 billion to $1.7 billion, reflecting the continued investment in our ongoing multiyear greenfield projects. This range is down from the preliminary estimate of $1.9 billion to $2 billion we provided you previously, reflecting our decision to not pursue some projects as well as timing changes related to existing projects. We continue to expect to return to a baseline run rate on CapEx levels during the second half of 2026. Moving to Slide nine, at year-end, readily marketable inventories, or RMI, exceeded our net debt by approximately $2.3 billion. The adjusted leverage ratio, which reflects our adjusted net debt to adjusted EBITDA, was 0.6 times at the end of the year. Slide ten highlights our liquidity position. At year-end, we had committed credit facilities of $8.7 billion, all of which were unused at the end of the year, providing ample liquidity to manage our ongoing capital needs. In addition, we had a cash balance of $3.3 billion, accumulated in large part as a result of the $2 billion of cash proceeds from the U.S. debt offering that we closed in September. All proceeds will be used to fund the cash portion of the Viterra transaction. In addition, we have a $6 million term loan commitment secured last year to refinance Viterra's outstanding bank debt upon closing the transaction. Please turn to Slide eleven. Our full-year adjusted ROIC was 11.1%, while our ROIC was 9.7%. Adjusting for construction in progress on large multiyear projects not yet operating and the excess cash on our balance sheet for the Viterra closing, adjusted ROIC would increase by approximately two percentage points and ROIC by approximately one percentage point. Our returns have declined from recent highs but remained well above our adjusted weighted average cost of capital of 7.7%. Moving to Slide twelve, for the year, we produced discretionary cash flow of approximately $1.2 billion and a cash flow yield of 11.1%, compared to our cost of equity of 8.2%. Please turn to Slide thirteen for our 2025 outlook. As Greg mentioned in his remarks, taking into account the current macro environment and market conditions, we expect full-year 2025 adjusted EPS to be approximately $7.75. This forecast excludes the impact of announced acquisitions expected to be closed during the year. In agribusiness, full-year results are forecasted to be down from last year, with lower results in processing where current performance in South America is expected to be more than offset by North American and European softseeds. Results in merchandising are forecasted to be down slightly from last year. Finally, in Specialty Oils, full-year results are expected to be down from last year, mainly driven by a more balanced supply and demand environment in North America. In corporate and other, full-year results are expected to be up from last year. Additionally, the company expects the following for 2025: an adjusted annual effective tax rate of 21% to 25%, interest expense in the range of $250 million to $280 million, capital expenditures in the range of $1.5 billion to $1.7 billion, and depreciation and amortization of approximately $490 million. With that, I'll turn things back over to Greg for some closing comments.

Thanks, John. So before we go to Q&A, I just wanted to offer a few closing thoughts. In today's complicated global environment, we're confident that the work we've done and continue to do to improve our business and operations positions us well to deliver on our critical mission of connecting farmers to consumers to deliver essential food, feed, and fuel to the world. We continue to see the benefits of our global operating model, portfolio optimization work, and financial discipline as we navigate the cycles inherent in our industry. With our culture of continuous improvement, our team continues to strengthen the business, both with the M&A work we talked about at the beginning of the call and our ongoing growth initiatives. Construction is going well on our large-scale projects, which will not only bring us new capabilities but also allow us to more efficiently and sustainably serve our customers. Improved productivity is at the heart of investments at dozens of our existing facilities around the world. The strategic use of capital, along with the implementation of the Bunge production system, is enabling our teams to set new performance records each quarter. We're also pleased with our performance on our sustainability priorities. A major step forward in November was when we became the first global commodity exporter capable of 100% traceability and monitoring of both our direct and indirect soy purchases for Brazil's priority regions. We're proud to reach this major milestone in our ten-year journey to achieve traceable and verifiable supply chains. As we think about our business in 2025 and beyond, regardless of how the macro environment evolves, we're confident that our team has the experience, skills, and agility to navigate the changes that drive performance. With the addition of Viterra, we'll be an even stronger Bunge Limited, with further diversification in assets, geographies, and crops, providing us with even more capabilities and optionality to help address the world's food security needs. With that, I'll turn to Q&A.

Thank you. We will now begin the question and answer session. If you are using a speakerphone, please pick up your handset before pressing the keys. And today's first question comes from Manav Gupta with UBS. Please proceed.

Good morning, Greg. Good morning, John. My first question relates to the 2025 guidance. What are the puts and takes if you could get a little more details? And the reason for the question is that, historically, you start at a number and as the execution is better than expected, the number rises. So I'm trying to understand what kind of conservatism is built into the guidance. And my follow-up, I'll ask it upfront also, is how are you accounting for the fact that there is policy uncertainty of 45

Well, let me start, and John can follow up. So as we look at 2025, we definitely heard it is an environment that has less visibility than normal with the trade disruptions and some of the uncertainty around U.S. biofuels. But what we did factor in is that really global oil supply and demand is pretty constructive, right? We've got less palm oil and less softseed competing with soy. So soy is very competitive right now, and it's taking a bigger share of global flows. And we are seeing more global biofuel demand when you look at it in total outside the U.S. Soybean meal demand has been very good, and that's driven, of course, by the profitability in the animal protein. There's also less wheat with a little bit tighter supply and demand, so less wheat competing with soybean meal and less competition from the mid proteins. Then in South America, we really expect improvement in Brazil. The industry in 2024 fought the logistical commitments in take-or-pay, which really created a lot of demand on supply, which kind of hurt margins across the platform for the industry. Those are exited in 2024 and won't be fighting that in 2025. And then, of course, Argentina, we've seen the export tax reductions, and that economy continues to stabilize. So that'll that that should drive a change in farmer behavior and farmer selling. Now we do expect lower margins in North America and Europe. And of course, as I believe John said, Viterra, CJ Selecta, and share repurchases are not factored into 2025.

And, Manav, I might just add there that, you know, relative to 45

Thank you for a detailed response. I'll turn it over.

The next question comes from Heather Jones with Heather Jones Research. Please proceed.

Thanks for the question. I just don't want to start with, so given the fact that you expect South America to be better this year as far as on take-or-pay and Argentina, just wondering what is the offset that y'all are expecting to be softer in 2025.

You said you're breaking up a little bit during the beginning, Heather. If I got the question right, it was as we see South America better, what are the offsets globally?

Yes. In merchandising specifically.

Oh, in merchandising specifically. Yeah. I think, you know, and if you look, John can restate even versus the model, merchandising is pretty conservative, and I think it reflects what we're seeing as a more balanced supply and demand situation globally, really across grains and oilseeds. And as we've talked about, that is always the toughest to, you know, to be able to predict from a timing and size of the magnitude of the opportunities. It would be hard to imagine that the situation will be more complex than we're dealing with right now. And we expect things to kind of get more clear in the second half. The watch out on merchandising, you know, versus the opportunity really is it does make it tougher for our suppliers, the farmers, as well as the consumers, to plan in these uncertain times. So they may draw back and be a little bit more spot here in the first quarter, first couple of quarters.

I'd maybe just add, Heather, that, you know, it's also year over year right now is in ocean freight. And really driven primarily by, you know, lower flat price now versus a year ago, but those markets can get very dynamic, you know, depending on trade flows. As government policy gets more clear and trade flows could be impacted, that certainly may provide a small opportunity on the ocean freight side.

The supply and demand probably is this most to be watched probably is corn. That one's probably the tightest. And so if we did have some weather problems in corn production, that's one of the ones that could contribute to merchandising as we need to work to solve some problems globally.

Okay. And then I don't know how much y'all can speak to this, but I just wanted to ask broadly. Your thinking on the Viterra acquisition and all, given the 45-degree model makes basically uncompetitive coming into the U.S., or at least not eligible at this time for a credit. And just the potential for export tax for tariffs on Canada. Just like, broadly, how are you thinking about that acquisition now versus, you know, maybe a year ago? And are you maybe able to offset some of those new negatives with greater synergies or greater share repo or just how are y'all thinking about those flips and takes?

I'd say that one, it hasn't all played out exactly what, you know, how the biofuels policy is gonna work out. But remember, canola is very favored by the food industry, as well as the canola meal has been very favored by the dairy industry. So that market will continue to go to a lot of the traditional demand. As you can imagine, obviously, we're watching what happens between the U.S. and Canada, except, well, that pitted back to the oil flows in the near term. But that would last forever. You know? And this is a long-term thing. So clearly, we'll be poised to deal with whatever we need to deal with in the near term, but I think the long term, you know, policy gets more clear. One thing is the market will adjust to that. And I think, you know, with the combination of Viterra, we should be in a better position globally to deal with whatever disruption might be created from policy or trade flows and changes.

Okay. Perfect. Thank you so much.

And our next question comes from Tom Palmer with Citi. Please proceed.

Good morning and thanks for the question. I wanted to maybe just start off kind of framing the earnings guidance for 2025 relative to the $8.50 mid-cycle outlook. I know it's a few years. It was laid out in 2022. I appreciate interest expenses higher, but share count's lower. So I guess just looking at, like, the segment profit pieces, could we maybe walk through expectations relative to that mid-cycle outlook?

Sure, Tom. I'll take that, and Greg, you can jump in if you have any other thoughts. But, you know, just a reminder, we put that together. You know, our most recent refresh was in the middle of 2022, which, of course, seems like an eternity now. But, you know, overall, how we're thinking about it on the processing side, margins are pretty steady versus what we had assumed back in the mid-cycle, but volume is down. Based on our original model, really driven by three factors. One is Ukraine has obviously been impacted with the war. And so pretty much lower volume levels there than fully anticipated. We sold our Russia business since that point in time, and then we're doing less tolling in South America. So volume is down in processing, but margins are fairly steady. On the merchandising side, we'll assume lower volatility going forward. We had modeled about $100 million a quarter in our baseline, and now, looking at the next year, we're thinking somewhere in the $50 million to $75 million per quarter range. So, obviously, that can change pretty quickly depending on what happens in the markets, but that's how we have it in the model. Net interest expense is higher, and, you know, really driven by interest rates and more debt. And I'll get to offsets in a second. And then on the sugar side, of course, we sold sugar, and we had that built into the model. But offsetting the higher interest and sugar impact is more share buybacks. And, you know, we originally in the model just assumed that pay down with any excess cash, but, of course, we've allocated a lot of that to share repurchase, which has been principally offset the loss of sugar earnings and the higher interest cost. And then we do have some higher costs, you know, than what we had anticipated at the time, really driven by growth initiatives and adding some capability investment, some money in technology, really to drive efficiency in the future. And frankly, inflation, you know, over the last couple of years is higher than what we expected in our original model. And then finally, on the favorable side, all that is on RSO. Refined Specialty Oil side, margins have been better than what we would have modeled in terms of at the time, assuming more of a baseline. On the specialty side, we performed better, but also refining premiums have stayed better than, you know, what we had anticipated in a mid-cycle. So that kind of wraps up the overall.

Probably just worth mentioning, John, is mentioning the calendarization of 2025 right now. So first half, second half at 40% and 60%. And then Q1 versus Q2 on the first half would be 40% and 60%.

Thank you. That was actually my next question. Maybe I'll just sneak one in quickly. Just on Viterra, I guess, what's kind of the plan once it closes in terms of communication? Is the idea to update guidance just on the next earnings cycle? Would it be more proactive than that? And just any kind of initial thoughts on how we might maybe think about Viterra's swing in earnings.

Yeah. I think, Tom, our plan right now is to update on the Q1 call. Obviously, it depends on the timing of close because we have a lot of work to do in getting the commercial teams together and looking at the future. We've focused all our time and attention on integration and getting through regulatory. And, of course, you know, given the fact that we're not one company, and the commercial teams are limited in communication, really limited to integration discussions and not what we can do together going forward. So we're looking forward to getting those teams together to talk about the future and what we can do together. And clearly, our first order of business will be taking a recast of how we feel about the balance of 2025 post-close, and then we'll share that as soon as we can. You know, in the meantime, we're excited about it. We know we're in a very cyclical business. You know, the environment's different than it was when we signed the deal, but this is about the long term. And we're just as excited today as the day we signed the deal, and you know, knowing the long run as we've had a chance to spend more time with their teams, we're really excited about what we can do together, especially in a world that seems to be more geopolitically uncertain and with weather volatility and all the things that should play well into our model. It's gonna give us that much more ability to manage.

Great. Thanks for such detailed answers, guys.

The next question is from Stephen Haynes with Morgan Stanley. Please proceed.

Hey, good morning. Thanks for taking my question. I wanted to ask on the Viterra regulatory process. You mentioned some constructive comments with Chinese regulators. I was hoping if maybe you could provide more color here on those discussions. And then is it also fair to assume that any back and forth between the U.S. and China on tariffs hasn't changed anything with those discussions? Thank you.

Yeah. I'd say we've had very productive discussions with the Chinese authorities, and we continue to respond to the questions and work through the process. And we feel we're getting to the later stages of that. And then as far as some of the external factors that are going on in the world, the one thing with our global footprint as well as Viterra's global footprint, we both had very good relationships with the China market, with our counterparties in China, with the regulatory authorities, and these are decade-long relationships. And it's very important, right, to be able to connect that important demand in China with the farmers, right? And that's what we do. That's vitally important to help farmers be successful and to be profitable and continue to grow. As well as it's important to China, you know, for their growing demand that we can connect them to all the different origins around the world. So those are long-term relationships and trust that's been built, and we'll just work through the process. We've seen a lot of different cycles and a lot of different situations in the world and relationships over those decades. And expect to in the coming decades, which is why we're so excited about putting these two companies together.

Okay. Understood. Thank you very much.

The next question comes from Salvatore Tiano with Bank of America. Please proceed.

Thank you very much. Firstly, I wanted to talk a little bit in more detail about the financial implications of the acquisitions that you're close to completing. So firstly, on Viterra, previously, you had said that it most likely would be dilutive in year one. And I want to see if you can put a finer point given that at this point, we're close to the completion. And also, if we have line of sight to year two or year three, whether this will be at this point dilutive or accretive. And on CJ Selecta, I think numbers that have been floated previously, we're talking about perhaps a $60 million EBIT contribution, which would be $0.30 EPS accretion on a full-year basis. Is this still the case?

I'll start with Viterra. We said out of the gate it was gonna be neutral to slightly positive on a pro forma basis after considering capturing first-year synergies and share buybacks. Of course, we've done a bit of the share buybacks. We have $800 million remaining on that program. I think, look, it's difficult to assess exactly how it'll have an impact in the first year because we haven't gotten together to put a forecast together for 2025. But again, we'll provide that clarity as soon as we can in 2025. And then really an outlook beyond there, we're gonna have to spend some time together and understand how the businesses will work together and how quickly we can capture the commercial synergies. I think on the cost synergy side, we feel very good about the cadence that we have, but, you know, it'll take time to get through the commercial side. So more to come on that. I think it's just gonna be a big company. It's a lot of work. We'll provide that clarity as soon as we can.

You know, with respect to CJ Selecta, you know, our general assumptions are largely intact on that. It's about a $600 million acquisition. And, you know, we expect mid-teen returns on that business. And so if that holds long term, certainly, we believe that's a great acquisition. And while, you know, any given quarter or year, you know, S&Ds can drive margins, we definitely believe that it's gonna be a very good acquisition going forward.

Perfect. Thank you very much. And also, I wanted to check a little bit on the capital allocation. So obviously, you are being more aggressive with buybacks and offsetting the dilution from the sale of the sugar JV. How should we think a little bit about that for this year? And on CapEx, I think previously you had mentioned around $2 billion for 2025. So currently, it's trending lower. And is this just finding efficiencies, taking off some projects off the books, or just being pushed back to 2026?

Yeah. So with respect to share buybacks, I mentioned we have $800 million left on our commitment relative to Viterra. The original commitment was doing that within 18 months of close, and certainly, that can come sooner if it makes sense. And as we look at other sources and uses of cash, we're always looking at buybacks as an option for any excess cash that we're generating. With respect to the CapEx estimate, really at $1.9 to $2 billion, and now we're down to $1.5 to $1.7 billion, driven really by kind of 50/50 between some timing pushing into early 2026 and canceling or our decision to forego some projects that we had on the slate that we decided not to pursue. So kind of a mix between the two. So overall, I think, you know, $1.5 to $1.7 billion, we feel like it's a pretty good estimate for next year, down $200 to $300 million from our original forecast.

Great. Thank you very much.

The next question is from Pohren Sharma with Stephens. Please proceed.

Thanks for the question. Just wanted to hop on and get a sense of the take-or-pay. Just wanna get some granularity here. Now you said you're expecting better results out of South America because you won't see as much of an impact. I'm just wondering, in 2024, did you see, was the impact kind of centered around the first half or the second half, or was it split evenly throughout the year?

Yeah. First, I'd say it was a total industry impact that unfortunately affected margins not only in origination but also on our exporting as well. And it was really something the industry struggled with all year. It accelerated a little in Q4 as the end of the year definitely approached, and, you know, we felt it across our system in beans and corn, but definitely in our global corn business as well.

Got it. Appreciate the color there. Guess on the follow-up, just wanna get a sense of potential trade scenarios. I know the situation's fluid now, but just, you know, looking at past history, last time around, Bunge Limited's South America business, at least the fundamentals were much better because it looks like flows shifted over from China to South America. So just wanna get your sense on the setup this time around if you do get tariffs in place, do you expect to see as much of a benefit in your South America business? If you could just help me understand the puts and takes there.

Yeah. One thing that I would point out as you think about it versus the challenge in the trade war in 2018, Bunge Limited is a very different company. The way we operate the global platform and the way that we've changed our operating model, I think we're much better positioned to react more quickly to the challenges and or opportunities. And we've made some improvements in the platform, right, in our asset platform. So we've got more capabilities from that standpoint as well. So that's the differentiation I would draw from 2018 to today and what we'll be dealing with here in 2025. And the other, we're a little bit battle-tested when you think about some of the things that we've been challenged with, whether it's African swine fever or geopolitical, you know, regional situations, COVID. So and the teams performed very well through all of those. So I think we're in a much better position from the capabilities and from a platform for the challenges that are in front of us.

Yeah. I might just add that obviously, we're used to supplying China out of both North and South America depending on the time of year. Harvest in the U.S., we supply a lot of beans out of the U.S., and then that shifts to Brazil or South America later in the year. And so very much a dynamic that we're used to. And so if trade policy affects trade flows, we'll be able to adjust to that accordingly, given our experience and obviously working with China, as Greg pointed out earlier, for decades.

Look, our goal ultimately, right, is to connect those demand markets with the farmers and send the appropriate signals, right, for the planting decisions that the farmers are making to be able to have, you know, the right crops and drive their profitability.

Got it. Appreciate the color, guys.

The next question comes from Ben Theurer with Barclays.

Good morning, Greg, John. So just wanted to follow up on one of the questions that's related to what Tom had in terms of, like, the baseline and kind of, like, tie that back into from what obviously you've shared already during the call, but I remember back roughly two and a half years ago, you also presented some of the impact that you're expecting from a growth CapEx and M&A versus share repurchases. So I think we've discussed M&A and share repurchase piece around it. But could you maybe also elaborate just given the increased CapEx that you've been seeing and what you've been putting out already last year for this year and then the probably even gonna carry over into the first half of 2026. What do you expect from that in terms of contribution as to your, let's just assume it's still the same baseline. What would that be? What's that incremental earnings that you think that can come out of that CapEx as you roll over into then the second half of 2026 and then beyond that into 2027 in a more normalized CapEx cycle, but with those assets being produced?

Sure. So our baseline assumption is we built our go-forward model was really built around CapEx and M&A, small amount of M&A, mostly large CapEx. And those projects are largely on track. Timing's been a little affected by weather and labor availability on a couple of them, but largely intact with our long-term team plan. And, you know, obviously, what the environment is like when those projects finish will impact maybe the near-term economics of those projects. And then CJ Selecta, for example, is one of those projects that we had had on our radar screen back when we built the model. And that, you know, hopefully, will close here soon. So I feel like, you know, we're largely on track on the growth side with what we modeled. And we had anticipated that impacting about $2.50. So we were expecting about an $11 baseline. You know, all else being equal, our baseline from $8.50 to $11. Now obviously, what the environment's gonna be like at the end of 2026, you know, when we largely expect these projects to be wrapped up, is anyone's guess at this point, but assuming a mid-cycle or relatively mid-cycle environment at that point, that's what we would expect our baseline to have reset to.

Okay. Perfect. And then just real quick as it relates to, like, the cadence, how to think about your buyback. I mean, obviously, you've done about $1.1 billion now as of December. That means there's still around about $900 million missing, which is within the Viterra deal. Is that still more likely now to happen post-transaction close, or would you continue to buy shares even ahead of it just given the liquidity you have right now post the sugar closure?

Yeah. So we have $800 million left. And, you know, while we haven't made any specific decision on when, but certainly, it'll be opportunistic. We'll get it done. But the cadence, we haven't really settled on when, but certainly, we will if it makes sense to do it sooner, we'll do it sooner. But if we have other reasons not to do it right away, we still consider that. But we'll get it done.

Okay. Perfect. Thank you. I love it too.

Our next question comes from Tammy

Hi. Good morning. Thank you so much. So my question is on the disaster aid package for U.S. farmers that was announced in December. I think they're getting assistance per acre for both corn and soybean. So do you see any potential benefits of any of this for any of your segments benefiting from this as the year progresses?

I think it's a kind of a small impact to us overall. What I think the upside and what's good is that farmers will have what they need to make the investment in this next crop in the seed and the inputs, you know, to plant the right crops and have the right productivity. So it's good that they've got that funding, and I think that support is positive, and that should be good for production.

Got it. That's helpful. And I want to follow up on that tariff question from earlier. I know it's still fluid, but there's a narrative that increased exports of more ag commodities out of the U.S. into some of the trading partners like China could be a negotiating tactic under the current administration. So given your footprint, how would that impact your outlook if, let's say, China promises to buy more from the U.S. maybe at the expense of South America?

Yes. One thing we're very glad that we have a very balanced global footprint. So whether that's on the merch side or on the crushing, the processing side, we've been able to balance a number of situations the last few years to continue to perform. It may create regional trade-offs, like in the U.S., where that would benefit export. And it may be slightly more challenging to crush, but then we would try to adjust elsewhere in our global system to respond to that.

Got it. Thank you. That's helpful.

And our next question comes from Derek Whitfield with Texas Capital. Please proceed.

Good morning, and thanks for taking my questions. Starting with refining, we've seen the spread between RBD, SBO, and crude SBO collapse to historically low levels. With the understanding that the majority of refiners are buying crude versus refined, where should this market settle out once demand returns as I can't imagine refining costs are less than two cents per pound?

I guess I'd start by saying we all along said that as the pretreatment got built in renewable diesel, we expected to see some of the margin move from the refined into the crude. We've definitely seen that, so the crude will carry a bigger piece on the crush. We've got a little bit different footprint with our global specialty oils business. We've got a very good customer base that we've continued to help manage their challenges and grow with. We've got a nice balance between the QSR as well as the CPG and the food at home. So our account mix has been favorable as we've seen some of the changes with the consumer. And then some of our specialty business on the oil side benefited from the tight cocoa butter supply, as well as you remember, we added a plant at Avondale. And as we've ramped that up in our capabilities here in North America on specialty oils. So kind of all that rolls into when you see what our refined overages are. Probably got a little bit different package or portfolio than what someone who might just be a North American player.

Derek, I'd just add that while the storyline is a lot of it's about energy and versus refined oil, the energy sector, we supply less oil this year not only as a percentage of our total book, but also just in actual volume, we provided less to the energy industry just because demand has been soft with all the uncertainty. So that could be upside in the future if obviously would be upside in the future if policy gets clarified and we think demand for soybean oil, whether refined or crude, is good. Either way, we want demand for that product. But refining premiums have held in there pretty well to Greg's point. It's been very resilient with the elastic demand from the food industry.

And I think it's probably also worth mentioning. Right? There is a big biofuel install base that exists now. It's in place. So as we work out, you know, the RBO and work out 45

Great. We definitely agree with that assessment as well. And then as my follow-up, I wanted to touch on 45

Yeah. Look. I'm not a scientist, so it's hard to understand all the math that goes into it. You know, today, it doesn't have a path. Obviously, the one we're watching more closely is winter canola because we have a program and think that obviously, the scores there should be considerably different, especially when you think about indirect land use. TBD. You know, the policy did make note that it was spring canola that they had assessed. And so we're hopeful that they'll be reviewing winter canola and treating that differently. Today, that's flowing to Europe since there is demand in Europe for winter canola seed and our program here in the U.S., it's growing. We'll see how things shake out. I mean, there's gonna be a lot of conversation certainly, but one thing we do know is that we're positioned to support wherever this stuff needs to go and stay at today, some of it's Europe. Clearly, 45

And I'd say what's encouraging is that we're seeing, you know, the players along the value chain work together with the policymakers to try to get, you know, the same set of facts for everyone to work together. So whether it's the energy industry, the processing industry, the farm groups, we are seeing everyone try to engage on the facts, and we believe that that will be productive over the long term.

Perfect. Thanks for your time.

The next question is from Andrew Strelzik with BMO. Please proceed.

Hey, good morning. Thanks for taking the questions. I had two questions. The first one is about some of the nearer-term uncertainties that you've been discussing, and you have, you know, cash crush that looks pretty poor versus a crush curve that gets better throughout the year. You know, what's your degree of confidence, or how do you weigh the risk that maybe some of these uncertainties kind of linger beyond the first quarter? Is there a degree of confidence that this will be more confined to the quarter, or how do you balance those two in your outlook?

I'd say when you look at the calendarization that we put together with delivering, you know, the $7.75. Right? We talked about that's approximately. So, you know, we see scenarios where that's got risk and, right? We look at where we're at right now, you know, in the cycles of harvest, got kind of second quarter, first quarter is going to be pretty tough. Second quarter will start to see some benefits from South America. Then as we get in the second half of the year, of course, from North America, perhaps. So I think that's reflected in that, expecting 40% of our earnings in the first half. And it's even more reflective when you think about in the first half, we're only expecting of that 40% for 40% of that to be in the first quarter. So that calendarization kind of shows, you know, what we expect to, you know, to roll out. And then the caveat around that being, look, tariffs, and possible retaliatory measures to the point they'll benefit one region and we'll have to manage that from another region. The one thing this does, it makes planning tougher and it may drive not only farmers but consumers to be more hand-to-mouth. That could make things, you know, delay a little bit more. So that'll be one of the, I think, factors to watch in 2025.

If you might just add that I know we've talked a lot about ovals, but some additional certainty around where things are gonna shake out from a renewable standpoint could have a significant impact on demand for soybean oil. Greg pointed out the assets are there. The capacities are to move, and they're able to take a significant amount of volume of soybean oil when they're running and running hard. So that could change the dynamics pretty quickly. But, again, policy uncertainty, people are very reluctant to book forward, and I think that's reflective of the cash markets as a lot of hand-to-mouth right now on that side because people aren't don't have enough conviction to follow through.

The other course is to watch, you know, watch the weather. Right now, it looks favorable for Brazil and how the harvest should develop there. Watching. It's a little dry in Argentina. So we wanna watch that closely. And then, you know, remember, meat economics are very good, and the animal numbers are out there. Soybean meal, priced very well, less competition from wheat and from the mid pros, and so we're at high inclusion rates on the meal side. And then John spoke to the fact about there's a lot of biocapacity out there and regulatory clarity is on the way. We hope there in the second half. And then don't forget globally, while we've got a lot of uncertainty in the U.S., right? Brazil's got fuel in the future. They'll be moving up to B15 on their way to B20. Indonesia's talked about going from B35 and on the way to B40. And then Europe has put some more favorable regulation policy in place for SAF and started to move towards maritime. There's a lot happening globally on the biofuels continuing to kind of quietly develop demand and investments continue to move forward.

Okay. That's super helpful color. I appreciate that. And my other question, you know, I guess I'm I appreciate we just got the 2025 guide, but I'm trying to think about earnings trajectory in this business over the next, I don't know, two or three years, next several years. And obviously, this year has a lot of disruption. A lot of kind of rebalancing. And then you have, you know, everyone can make their own assumption on kind of the pro forma numbers with Viterra, CJ Selecta, but, you know, then you have synergies and you have, you know, returns on these capital projects and maybe less a lack of visibility going forward. Do you see 2025 as an earnings base maybe on a pro forma basis that you should grow from over the next several years or kind of like a troughish type of number and, you know, maybe help us with if there's any of the building blocks that I left out, kind of how you think about the trajectory of the business over the next couple of years. Thanks.

Let me start. The one thing would be yes. And that's because think about, you know, we're excited about, you know, Viterra and Bunge Limited together. But I'll tell you just really excited are the teams. Right? They're engaged, and they're anxious. You know, we've continued to be competitors, and so the commercial teams have not been able to do that planning. We're excited about the commercial synergies when we're able to get those teams together and start to do the work as one Bunge Limited here into the future. So from that, that's part of where we are building off of. And then, you know, that'll also provide the cash for us to continue to invest as we go forward.

This concludes today's question and answer session. I would now like to turn the conference back over to Greg Heckman for any closing remarks.

I'd say thank you very much for joining us today. We appreciate your interest in Bunge Limited, and we look forward to speaking to you again soon. Have a great day.