Bunge Ltd Q2 2015 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Ann Duignan - JPMorgan - Analyst : Can we talk about Europe a little bit -- way down results this quarter. But given everything we're hearing about weather conditions so variable across the region in Europe, can you talk about the upcoming crop, and how that might end up being smaller than expected and weigh on performance going into next year?

Question: Ann Duignan - JPMorgan - Analyst : Okay, I appreciate the color. It's good to know that Ukraine/Russia is a net positive. And then switching to Brazil, we understand the consumer, and the weight on the consumer in the region, but can you talk a little bit about farmer sentiment, and whether you would expect an expansion in acres this upcoming year or what are you hearing kind of feet on the street from Brazilian farmers?

Question: Ann Duignan - JPMorgan - Analyst : Okay, I'll leave it there and get back in line. Thank you.

Question: Vincent Andrews - Morgan Stanley - Analyst : Just want to follow up on Food & Ingredients. I mean, I understand where the weakness is coming from. I guess where I wanted to get more clarity is why it really happened so dramatically this quarter? Like, why didn't it happen a year ago? Why didn't it happen last quarter? And I apologize if you addressed this in the prepared remarks, I was on another call, but what actions you can really take around these issues, and how much of them are structural or secular versus have some cyclicality to it that might improve? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 30, 2015 / 2:00PM, BG.N - Q2 2015 Bunge Ltd Earnings Call

Question: Vincent Andrews - Morgan Stanley - Analyst : To follow up on the milling side, I presumably -- I know you have a big customer in cereal, and I think you have a big customer in beer as well, who are having some challenges. Are there other places you can put that product, whether it is in the United States or somewhere else, or are you really dependent on the volume trends in cereal and beer?

Question: Vincent Andrews - Morgan Stanley - Analyst : Okay, thanks very much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 30, 2015 / 2:00PM, BG.N - Q2 2015 Bunge Ltd Earnings Call

Question: Farha Aslam - Stephens Inc. - Analyst : Could you share with us some color regarding what the impact of maybe mark-to-market was in this quarter that you expect to get back in the next quarter? Because it clearly sounds like you have gotten some of it back already, and that's part of what's giving you confidence in the second half of the year.

Question: Farha Aslam - Stephens Inc. - Analyst : That was the bulk of it? Is there anything with soy crushing and did you lock in margins that you'll get back in the back half of the year?

Question: Farha Aslam - Stephens Inc. - Analyst : Great. And then, could you just share with us some more color on crush margins in China? In your release, you had highlighted that they are below what you had experienced in the second quarter, but still above year over year. Could you just put some numbers or context around that commentary?

Question: Farha Aslam - Stephens Inc. - Analyst : That's helpful, thank you. And then, my final question relates to export demand that you see out of both Brazil and North America. Given the slowdown in China, do you expect that to impact their imports of grain, and will that impact your second half?

Question: Farha Aslam - Stephens Inc. - Analyst : Great, that's helpful. Thank you.

Question: Cornell Burnette - Citi Research - Analyst : This is Cornell Burnette in with a few questions for David.

Question: Cornell Burnette - Citi Research - Analyst : Okay, very good. The first one is just, looking at the guidance for the back half of the year, it seems like a good improvement in Agribusiness trends versus the first half. And just wanted to know what gives you confidence that you can get there, given your comments that China is probably doing not as well as you have seen first-half margins come in. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 30, 2015 / 2:00PM, BG.N - Q2 2015 Bunge Ltd Earnings Call And then, some of the ongoing issues that you would expect with the softseed crushing margins? And also, if you could remind us what percentage of your total crush would come in softseeds?

Question: Cornell Burnette - Citi Research - Analyst : Okay, very good. And then, one more on the food products side, I believe you guys indicated earlier that your long-term projections for profits there are still in line with where they have been. I believe you were looking for something like $470 million in from product profitability by 2017. And I just wanted to know, if we continue to see weakness in the Brazilian economy and maybe some of the other economies where you play in, how can you still get to that number? What are some of the things that -- additional initiatives that you might take to offset some of this weakness in the markets, if it persists?

Question: Cornell Burnette - Citi Research - Analyst : Very good, thank you.

Question: Patrick Chan - BMO Capital Markets - Analyst : This is Patrick Chan in for Ken.

Question: Patrick Chan - BMO Capital Markets - Analyst : Hi, just a quick question about, I guess canola crush margins. I know additional capacity is coming online from one of your competitors sometime this year. So, I guess, does that change your margin structure going forward in that market?

Question: Patrick Chan - BMO Capital Markets - Analyst : I guess, switching geographies a little bit then, in terms of Argentina, you had indicated that the crush time period will be a little bit longer this year. But given how the elections are taking place sometime in October, do you -- what do you think the cadence of farmers selling will be in terms of soybeans going forward?

Question: Patrick Chan - BMO Capital Markets - Analyst : And lastly, in China, there has been a lot of talks about the hog market slowing down, and do you see that as a structural shift down in soybean meal demand? I know you are a little bit more positive year over year in the Chinese market, but given how the hog producers there or the markets over there are importing more pork going forward, what do you think the impact will be?

Question: Patrick Chan - BMO Capital Markets - Analyst : Great, thank you.

Question: Adam Samuelson - Goldman Sachs - Analyst : So, I guess my first question is the Agribusiness guidance, for at least $1 billion for the year, which would imply at least about $535 million or so for the back half, which would only be up about $30 million year over year. In the fourth quarter of 2014 you had an $80-million mark-to-market reversal. And you had a $30-million China inventory loss on Chinese soybeans. You had trading losses late in June that you said have reversed. And, Soren, you just went through the market mosaic for both oilseeds and grains, and the general balance was reasonably constructive. I wasn't really detecting a lot of big negatives year over year in that mix. What am I missing?

Question: Adam Samuelson - Goldman Sachs - Analyst : Okay, that's helpful. Switching gears, Argentina -- take the previous question a little bit differently. I mean, there is a -- Argentina's soybean inventories are very high; they've had a record crop; the farmers have been storing them for years as a currency hedge. Say the election goes as most people expect, and that there is a devaluation that does happen sometime late this year or early in 2016, that could be a flood of soybeans that hits the global market. How does that benefit or hurt your Business in aggregate given your disparate exposures?

Question: Adam Samuelson - Goldman Sachs - Analyst : Okay. And then a quick one: I think in the prepared remarks, you alluded to continuing to evaluate the strategic options on sugar, but any update on sugar that you can provide at this point?

Question: Adam Samuelson - Goldman Sachs - Analyst : All right, great, thanks. I'll pass it along.

Question: Sandy Klugman - Vertical Research Partners - Analyst : Thank you. So, it's increasingly looking like we will have another large corn crop in North America. But given the price declines we have seen since mid-July, and the increases we have seen in on-farm storage capacity over the past several years, are there any concerns that this will negatively impact your origination capabilities in the fall, if farmers elect to hold on to grain as they did last year?

Question: Sandy Klugman - Vertical Research Partners - Analyst : Okay, that's fair. And then, your Business seems particularly difficult to forecast. I understand you are committing to an $8.50 EPS target, but I am just curious what drives your decision to tie that target to 2017 in particular, as opposed to leaving the timing more open-ended?

Question: Sandy Klugman - Vertical Research Partners - Analyst : Okay, thank you very much.

Question: Evan Morris - BofA Merrill Lynch - Analyst : A lot of my questions were already asked, but I just have a couple of quick ones. On the Food & Ingredients guidance, just trying to understand -- so, you expect sequential improvement in the second half, but down year over year I guess, and then down for the full year as well. So, it will be down in the second half year over year, and you are saying down for the full year, year over year, as well?

Question: Evan Morris - BofA Merrill Lynch - Analyst : Okay, that's helpful. And then, you made a comment earlier in the prepared remarks just saying, I think it was intensifying programs on operational efficiencies, I guess given some of the broader operating environment. Is that -- are you pulling forward -- does that mean you are pulling forward some of those cost savings that you had been targeting in Agribusiness and Food & Ingredients, or is it suggesting that you have turned over more rocks and you have found more cost savings than what you originally had alluded to or guided to?

Question: Evan Morris - BofA Merrill Lynch - Analyst : Okay. And then, maybe that brings you back to the question about the $8.50 in just the past. So, if you are going to accelerate some of these cost savings, but operating profits going lower, your base is lower this year than I guess we have originally expected or you expected to get. So, is it then, just to get from where we end this year, since you have already -- you are pulling forward some of those cost savings, it's really then just about base business growth is the key lever then between 2015 and hitting that $8.50 target? Is that potentially going to be the majority of the driver then of getting there?

Question: Evan Morris - BofA Merrill Lynch - Analyst : Okay, perfect, thank you.