Q2 2020 RESULTS REVIEW July 29, 2020
Forward-Looking Statements • Today’s presentation includes forward - looking statements that reflect Bunge’s current views 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 Securities and Exchange Commission concerning factors that could cause actual results to differ materially from those contained in this presentation and encourages you to review these factors. | Q2 2020 RESULTS REVIEW 2
Today’s Agenda CEO comments Financial performance Q&A | Q2 2020 RESULTS REVIEW 3
Q2 Highlights Excellent industrial performance across all of our core businesses Record capacity utilization and improved reliability in crushing • Lowest quarterly operating cost for soy crush in the last three years • Exceptional coordination of trade flows • Realized benefit from risk management decisions in 1H2020 Continuing to execute on key priorities | Q2 2020 RESULTS REVIEW 4
Bunge Limited Earnings Highlights Three Months Ended Six Months Ended June 30, June 30, $ millions, except per share data 2020 2019 2020 2019 Net income attributable to Bunge common shareholders-diluted $ 3.47 $ 1.43 $ 2.14 $ 1.71 Adjusted Net income attributable to Bunge common shareholders-diluted (a) $ 3.88 $ 1.52 $ 2.67 $ 1.90 Adjusted Core Segment EBIT (a) $ 943 $ 287 $ 885 $ 520 Agribusiness (c) $ 843 $ 211 $ 716 $ 360 Oilseeds 544 174 392 289 Grains 299 37 324 71 Edible Oils 51 43 97 103 Milling Products 30 27 48 49 Fertilizer 19 6 24 8 Adjusted Corporate and Other EBIT (a) (b) $ (54) $ 86 $ (111) $ 37 Adjusted Non-Core Segment EBIT (a) $ (85) $ (3) $ (135) $ (21) Adjusted Net income attributable to Bunge common shareholders – diluted, Adjusted Core Segment EBIT, Adjusted Corporate and Other EBIT, and Adjusted Non-Core Segment EBIT are non-GAAP a. financial measures. Reconciliations to the most directly comparable U.S. GAAP measures are included in the appendix attached to this slide presentation posted on Bunge’s website. Corporate and Other includes salaries and overhead for corporate functions that are not allocated to the Company’s individual business segments, as well as certain other activities including Bunge b. Ventures and the Company's captive insurance and securitization activities. Agribusiness segment is comprised of Oilseeds and Grains businesses. See appendix attached to this slide presentation posted on Bunge’s website for descriptions of the Oilseeds and Grains c. businesses. | Q2 2020 RESULTS REVIEW 5
Focus on Cost Management Q2 SG&A down $28M vs prior year as organizational re-design actions starting to take effect Q2 2019 SG&A Q2 2020 SG&A • Q2 adjusted SG&A down $28M (12) • $20M of cost savings 346 (51) 335 #2 323 Notable − Organizational savings: ~30% items 295 Notable ($ millions) ($ millions) items − Indirect spend: ~70% • $8M impact from other items, to include FX, inflation, changes in perimeter and As Adjusted As Adjusted performance-based pay reported reported | Q2 2020 RESULTS REVIEW 6
Cash Flow Highlights Increasingly durable balance sheet as retained cash flow is used to pay down debt Adjusted Funds From Operations (Adjusted FFO) (1) $1,348 $1,096 #2 Retained cash of $546M ($ millions) $100 $317 used to reduce debt $317 $524 $385 2019 Q2 2020 TTM Dividends (2) Adjusted FFO Buybacks Capex (1) Adjusted Funds From Operations is a non U.S. GAAP measure. Reconciliation to the most directly comparable U.S. GAAP measure is provided in the appendix. Adjusted FFO = Cash flow from operations before working capital changes, Net (income) loss attributable to noncontrolling interests and redeemable noncontrolling interests, foreign exchange loss (gain) on debt and Mark-to-Market timing difference, after tax. (2) Dividends paid to common and preference shareholders | Q2 2020 RESULTS REVIEW 7
Majority of Net Debt Finances RMI At Q2 quarter end 84% of Net Debt was used to finance Readily Marketable Inventories (RMI) Net Debt ex RMI: $1.7 $1.8 $0.8 $0.5 $0.9 Net Debt ex RMI / 10% 16% 28% 29% 17% Net Debt (%): #2 $5.8 $6.2 $6.1 $4.8 ($ billions) $4.7 4.9 $4.4 $4.4 $4.3 $3.9 Q2 Q3 Q4 Q1 Q2 2019 2020 Net Debt RMI | Q2 2020 RESULTS REVIEW 8
Liquidity Position Remains Strong Bunge has committed credit facilities of ~$4.3 billion, of which ~$3.6 billion was unused and available at June 30, 2020 Amount Drawn ($ millions) Facility Maturity Size Jun 30, 2020 CP Program / Liquidity Facility Dec 2023 $600 $498 2022 Revolving Credit Facility Sep 2022 $865 $0 2022 Revolving Credit Facility Dec 2022 $1,750 $200 2023 Revolving Credit Facility Dec 2023 $1,100 $0 Total Committed Liquidity (1) $4,315 $698 (1) While the facilities themselves are available on a committed basis through the respective maturity date, individual borrowings set up under the facilities typically average between 15 to 90 days. | Q2 2020 RESULTS REVIEW 9
Generating Cash Flow to Drive Shareholder Value YTD Capital Allocation Strong credit (85) 817 metrics (17) 715 (142) (42) Shareholder ($ millions) (100) dividends 431 Reinvestment opportunities Share Q2 YTD Sustaining Preferred Discretionary Dividends to Growth/Prod. Share Retained (1) Adj. FFO Capital Dividends Cash Flow Common Capital Buybacks Cash Flow buybacks Shareholders (1) Adjusted Funds From Operations is a non U.S. GAAP measure. Reconciliation to the most directly comparable U.S. GAAP measure is provided in the appendix. 10 | Q2 2020 RESULTS REVIEW
Strong Earnings Momentum Drives Higher Returns AROIC captures benefits of earnings driven from utilization of RMI Bunge Limited (excluding Sugar & Bioenergy) 11.7% 11.5% ROIC AROIC 10.4% 9.7% 7.9% 9.1% 8.3% 9.6% 6.5% 8.1% 5.9% 6.6% 6% 6.6% 2015 2016 2017 2018 2019 Q2-20 2015 2016 2017 2018 2019 Q2-20 TTM TTM WACC ROIC AROIC AWACC • Q2 2020 presented as Trailing 4 Quarters • ROIC Includes adjustments for timing differences and CTA • AROIC includes adjustments for timing differences, CTA, and RMI • CTA Adjustments were made for 2019 and Q2 2020 TTM. CTA adjustment is the difference between balance of Cumulative Foreign Exchange Translation Adjustment and December 31, 2018 balance • Q2 2020 ETR adjusted to weighted average of 2019 actual and 2020 projected ETR 11 | Q2 2020 RESULTS REVIEW
Cash Flow Yield Demonstrates Bunge’s Durability Bunge Performance 2015 – YTD Discretionary Cash Flow (1) 1,057 20.0% 981 973 1,000 19.1% 18.0% 17.2% 16.0% 749 800 721 14.0% 15.3% 13.7% 13.4% 12.0% 569 ($ millions) 600 10.0% 7.0% 8.0% 8.7% 400 6.0% 4.0% 200 2.0% 0 0.0% 2015 2016 2017 2018 2019 Q2-20 TTM Discretionary Cash Flow Cash Flow Yield Cost of Equity Note: to reduce the impact of foreign currency on book value of equity, CTA was held constant at 12/31/2018 level for 2019 and TTM Q2-20 (1) Discretionary cash flow and Cash Flow Yield are Non-GAAP measures. See appendix for reconciliations to the most directly comparable U.S. GAAP measure. 12 | Q2 2020 RESULTS REVIEW
Outlook Expect FY2020 EPS to be higher than prior outlook • Agribusiness ahead of prior outlook and prior year • Modest improvement in Edible Oils versus prior outlook, but impacted by COVID-19 headwinds • Non-core segment below prior outlook due to impact of foreign exchange volatility in the first half of the year on Sugar and Bioenergy JV | Q2 2020 RESULTS REVIEW 13
Closing Remarks and Q&A
Agribusiness: Oilseeds & Grains Definitions Grains Oilseeds • Grain origination • Oilseed processing Grains (corn, wheat, barley, rice) ‒ Soybean: U.S., South America, ‒ Europe, Asia Oilseeds (soybean, rapeseed/canola, ‒ sunseed) Rapeseed/Canola: Europe, Canada ‒ #2 • Grain trading & distribution Sunseed: Eastern Europe, Argentina ‒ Global trading and distribution of grains ‒ • Oilseed trading & distribution • Related services Global trading and distribution of ‒ oilseeds, protein meals and Ports ‒ vegetable oils Ocean freight ‒ • Biodiesel production (partially JVs) Financial services ‒ | Q2 2020 RESULTS REVIEW 15
Core Segment Volume Highlights Three Months Ended Six Months Ended June 30, June 30, 2020 2019 2020 2019 In thousands of metric tons 38,035 34,009 71,335 68,438 Agribusiness #2 18,184 33,396 Oilseeds 16,990 33,478 19,851 37,939 Grains 17,019 34,960 2,279 2,328 4,628 4,637 Edible Oil Products 1,127 1,113 2,275 2,218 Milling Products 375 305 551 501 Fertilizer | Q2 2020 RESULTS REVIEW 16
Recommend
More recommend
