Bunge Global SA Q4 2024 Earnings Call Summary

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

Question: Manav Gupta - UBS - Analyst : Good morning, Greg. Good morning, John. My first question relates to the 2025 guidance. What are the puts and takes, if you could give a little more detail? 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 45Z. So how are you accounting for that in your annual guidance? Thank you.

Question: Manav Gupta - UBS - Analyst : Thank you for the detailed response. I'll turn it over.

Question: Heather Jones - Heather Jones Research - Analyst : Thanks for the question. I also want to start with (technical difficulty) so given the fact that South America should be better next year as far as on take-or-pay and Argentina, I'm just wondering what is the offset that you all are expecting that to be softer in '25?

Question: Heather Jones - Heather Jones Research - Analyst : Yes, in merchandising specifically.

Question: Heather Jones - Heather Jones Research - Analyst : Okay. And then I don't know how much I can speak to this, but I just wanted to ask broadly, your thinking on the Viterra acquisition and all, given the 45 -- the GREET model makes canola basically uncompetitive coming into the US 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 maybe a year ago? And are you may be able to offset some of those new negatives with greater synergies or greater share repo? Or just how are you all thinking about those puts and takes?

Question: Heather Jones - Heather Jones Research - Analyst : Okay, perfect. Thank you so much.

Question: Tom Palmer - Citi - Analyst : Hi. Good morning and thanks for the question. I wanted to maybe just start off kind of framing the earnings guidance for '25 relative to the $850 million mid-cycle outlook. I know it's a few years, it was laid out in '22. I appreciate interest expense is higher, but share count is lower. So I guess just looking at like the segment profit pieces, could we maybe walk through expectations relative to that mid-cycle outlook?

Question: Tom Palmer - Citi - Analyst : 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 swinging earnings? Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 05, 2025 / 1:00PM, BG.N - Q4 2024 Bunge Global SA Earnings Call

Question: Tom Palmer - Citi - Analyst : Right. Thanks for such detailed answers, guys.

Question: Steven Haynes - Morgan Stanley - Analyst : 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 a bit more color here on those discussions. And then is it also, I guess, fair to assume that any back and forth between the US and China on tariffs hasn't changed anything with those discussions? Thank you.

Question: Steven Haynes - Morgan Stanley - Analyst : Okay. Understood. Thank you very much.

Question: Salvator Tiano - Bank of America - Analyst : Yes. 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 $60 million EBIT contribution, which would be $0.30 EPS accretion on a full year basis. Is this still the case?

Question: Salvator Tiano - Bank of America - Analyst : 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? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 05, 2025 / 1:00PM, BG.N - Q4 2024 Bunge Global SA Earnings Call And on CapEx, I think previously, you had mentioned around $2 billion for 2025. So clearly, it's trending lower. And is this just finding efficiencies, taking off some projects of the books or just pushing -- being pushed back to 2026?

Question: Salvator Tiano - Bank of America - Analyst : Great. Thank you very much.

Question: Pooran Sharma - Stephens - Analyst : Thanks for the question. Just wanted to hop on and get a sense of the take-or-pay. I just want to 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?

Question: Pooran Sharma - Stephens - Analyst : Got it. Appreciate the color there. I guess on the follow-up, just want to get a sense of potential trade scenarios. I know the situation is fluid now, but just looking at past history, last time around, Bunge'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 want to 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. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 05, 2025 / 1:00PM, BG.N - Q4 2024 Bunge Global SA Earnings Call

Question: Pooran Sharma - Stephens - Analyst : Got it. Appreciate the color, guys.

Question: Ben Theurer - Barclays - Analyst : 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 2.5 years ago, you also presented some of the impact that you're expecting from, a, growth CapEx, and b, M&A versus share repurchases. So I think we've discussed the 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 that's probably even going to carry over into first half 2026, what do you expect from that in terms of contribution as to your let's just assume it's still the same baseline? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 05, 2025 / 1:00PM, BG.N - Q4 2024 Bunge Global SA Earnings Call 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 '26 and then beyond into 2027 in a more normalized CapEx cycle, but with those assets being produced?

Question: Ben Theurer - Barclays - Analyst : Okay, perfect. And then just real quick as it relates to like the cadence, how to think about share buybacks. I mean, obviously, you've done about $1.1 billion now as of December. So 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?

Question: Ben Theurer - Barclays - Analyst : Okay, perfect. Thank you. I'll leave it go.

Question: Tami Zakaria - JPMorgan - Analyst : Hi, good morning. Thank you so much. So my question is on the disaster aid package for farmers that was -- US farmers that was announced in December. I think they're getting assistance per acre for both corn and soybeans. So do you see any potential benefits of any of this -- for any of your segments benefiting from this as the year progresses?

Question: Tami Zakaria - JPMorgan - Analyst : Got it. That's helpful. And I wanted to follow up on that tariff question from earlier. I know it's still fluid, but there is a narrative that increased exports of more ag commodities out of the US 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 US maybe at the expense of South America?

Question: Tami Zakaria - JPMorgan - Analyst : Got it. Thank you. That's helpful.

Question: Derrick Whitfield - Texas Capital - Analyst : 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 $0.02 per pound.

Question: Derrick Whitfield - Texas Capital - Analyst : Great. We definitely agree with that assessment as well. And then as my follow-up, I wanted to touch on 45Z. In your view, is there a merit from a carbon counting perspective for canola to have a materially higher CI than SBO when you evaluate ag and processing practices?

Question: Derrick Whitfield - Texas Capital - Analyst : Perfect. Thanks for your time.

Question: Andrew Strelzik - BMO - Analyst : Good morning. Thanks for taking the questions. I had two questions. The first one about some of the near-term uncertainties that you've been discussing. And you have cash crush that looks pretty poor versus a crush curve that gets better throughout the year. 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?

Question: Andrew Strelzik - BMO - Analyst : Okay. That's super helpful color. I appreciate that. And my other question, I guess -- I appreciate we just got the 2025 guidance, but I'm trying to think about the earnings trajectory of 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 -- everyone can make their own assumption on kind of the pro forma numbers with Viterra and CJ Selecta, but then you have synergies and you have 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 trough-ish type of number? And 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.

Question: Andrew Strelzik - BMO - Analyst : Great. Thank you very much.