Bunge Global SA Q3 2024 Earnings Call Transcript

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

Question: Andrew Strelzik - BMO Capital Markets Equity Research - Analyst : I just wanted to start on crush margins. There's been a lot of concern in the market throughout this year on what would happen with crush margins, but the curve is only strengthened at least for the US for the rest of this year and also 2025. So I guess the question is, how are you thinking about crush margins from here in terms of durability and the ability to capture that margin strength? I don't know if there are offsets in other reasons -- in other regions, excuse me. And then the press release says that you passed through the 3Q processing strengths of the guidance, but I didn't know if you made any changes to your assumptions for the fourth quarter. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 12:00PM, BG.N - Q3 2024 Bunge Global SA Earnings Call

Question: Andrew Strelzik - BMO Capital Markets Equity Research - Analyst : Got it. Okay. That's helpful. And then I guess if I zoom out, and I know you're not giving '25 guidance at this point, but -- and obviously, a lot of work to do around acquisitions and buybacks going forward as well. But if I just look at the base business, at current levels, I guess, crush appears to be above the baseline. You see the refined continues to hold in better. So I guess just from a high level, how would you frame the setup into 2025, I guess, relative to maybe a normal type of year for Bunge?

Question: Salvator Tiano - BofA Securities, Inc. - Analyst : Yes. I want to ask a little bit about your customers on the fuel side. And specifically, first thing there was an article this week on Bloomberg about how you and some other big crushers are actually slowing down soybean purchases and crushing volumes because you're going to see less purchases from your fuel customers. At the same -- so if you have any comments on that and your strategy there? What you're seeing in terms of demand in Q4 and perhaps in Q1 as the tax credit landscape changes? And also what other feedback you have, I guess. On the other hand, one of the major customers on the fuel side has mentioned that they're using higher CI score feedstocks right now before they make a more major switch in to lower CI feedstocks. So what are you seeing there? What are your thoughts on this and the risk it poses for next year?

Question: Salvator Tiano - BofA Securities, Inc. - Analyst : Perfect. And if I may just follow up. I guess technically with the new credit landscape, if someone can only use lower CI feedstocks, they would fully go away from soybean oil, but the main issue is obviously logistical and supply challenges. So do you have any views on the supply and the supply REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 12:00PM, BG.N - Q3 2024 Bunge Global SA Earnings Call restrictions and limitations for tallow and used cooking oil, and how much essentially of the feedstock mix, this could be next year or the next few years?

Question: Thomas Palmer - Citigroup Inc. - Analyst : I wanted to just ask on Viterra, and thanks for the update on unexpected timing. Just on the business' recent results, does it affect at all how you look at the longer-term earnings power for the business? Or should we look at kind of the details you laid out last summer as still largely holding?

Question: Thomas Palmer - Citigroup Inc. - Analyst : Okay. And then just one topic that had come up in previous quarters, and you did touch on it earlier, it was just the lack of farmers selling in South America, I think, and how that's maybe -- there's offset that maybe hurts margin in South America, but does seem to be helping soy crush margins as we look at Europe and North America. Just any thoughts on the pace of farmer selling? Is there a point where that should really pick up as we move towards maybe this new harvest in the first half of '25?

Question: Manav Gupta - UBS Investment Bank - Analyst : My question is on your growth CapEx. You're obviously spending on your growth projects. Help us understand what's the progress over there? When are the key start-up dates for these growth projects? When do they -- when do you expect them to come online and start making a material contribution to the EBITDA?

Question: Manav Gupta - UBS Investment Bank - Analyst : Perfect. My follow-up here is a little bit -- you've also mentioned this that although the deal has been delayed a little, it's giving you more time to plan. So help us understand now when Viterra does close, do we expect some of those synergies to be realized earlier than expected? How has the time line of moving the deal allowed you to plan better as you close on it?

Question: Heather Jones - Heather Jones Research - Analyst : I had a question on bean oil and meal, but starting with bean oil. So given the biofuel policy uncertainty we've got in the US, demand for bean oil could be very depressed in late Q4 and Q1. And I was just curious if you think the export demand could be strong enough to offset that, given soybean oil's attractive price relative to palm and rape. And also, do you see any potential logistical constraints to the US handling that magnitude of exports?

Question: Heather Jones - Heather Jones Research - Analyst : Okay. And then on meal, so that demand has been much stronger than expected this year, and it seems to be because of a big step-up in feed ration inclusion because animal numbers globally just aren't up that much. So when we look to '25, I was wondering if you think there is room for additional sizable increases in ration inclusion, assuming the price is relatively attractive? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 12:00PM, BG.N - Q3 2024 Bunge Global SA Earnings Call

Question: Heather Jones - Heather Jones Research - Analyst : And if I could sneak in a clarifying question. So you guys probably have as good a visibility as anyone into fee profiles globally. I mean, could we see a situation in '25 where we have an increase in inclusion rates as much as we did this year, like I mean I don't know if we're near a cap like -- or could we see another sizable step-up?

Question: Steven Haynes - Morgan Stanley - Analyst : Maybe I just wanted to ask a kind of follow-up question on the refined side of things. I think there was a comment before to an earlier question about being resilient and better than baseline in 2025. I think you're still kind of quite a bit above baseline where we are right now. So can you kind of help frame, I guess, what a bit better looks like and how we should be thinking about it next year?

Question: Steven Haynes - Morgan Stanley - Analyst : Got it. And then just on the meal side of things, there's been a bunch of capacity that's going to come on in the US this year. Our understanding is that it's not kind of fully running yet. It takes some time to kind of hit that run rate. Is the market kind of feeling the impact of this yet? Or how should we think about it as even more supply is expected to come on in '25 and there's some projects slated for '26 yourself included. So how should we be thinking about the market's ability to, I guess, absorb the excess meal going forward?

Question: Benjamin Theurer - Barclays Bank - Analyst : Greg, John, so just a few things to clarification. So I think you said there's a $0.15 impact on the loss that you need to book for the Bioenergy, the disposal? Was that something that you expected to happen in 3Q and now it's just moved into 4Q for that implicit downgrade of that $0.15? So that would be question number one. And then just question number two, related to the timing of Viterra and the pending approvals. Can you remind us which are the big jurisdictions that are still pending right now? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 30, 2024 / 12:00PM, BG.N - Q3 2024 Bunge Global SA Earnings Call

Question: Benjamin Theurer - Barclays Bank - Analyst : Just sugar?

Question: Benjamin Theurer - Barclays Bank - Analyst : Okay.

Question: Benjamin Theurer - Barclays Bank - Analyst : Okay. And then on the approval?

Question: Benjamin Theurer - Barclays Bank - Analyst : Okay. And then Argentina, I mean, obviously, that's a post-close approval process, but there was some news just recently about an Argentine soy exporter that you were planning to take over and that got kind of blocked out of bankruptcy. Has that any consequences on how you think about the post-close approval process in Argentina?