BG - Earnings call transcript Q1 2019

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Operator

Good day and welcome to the Bunge Limited First Quarter 2019 Earnings Release and Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Ruth Ann Wisener, Vice President, Investor Relations. Please go ahead.

Ruth Ann Wisener

Thank you, operator and thank you for joining us this morning. here be to great at Bunge. It’s

our of get that we direct the we most non-GAAP can that found section X presentation cause with risks includes remind started, forward-looking financial you under industry this actual current measure to has our GAAP directly well. as forward-looking contained statements I various know today’s you to to our from you that be of reports Investors the those let and These to factors. in uncertainties. and at on reflect performance review have respect materially These presentation, Slide Bunge’s posted website view measures bunge.com additional statements I’d results in Investor conditions. Reconciliations SEC want to discussion. provided with Before website events, to slides information comparable its subject could financial Bunge on differ are accompany Presentations. are in to like encourage to file future these that you we and to the concerning factors and

turn On call the are Greg now Thom Boehlert, to Heckman, over morning Chief Financial call I will Executive Officer Greg. Officer. Chief this and the

Greg Heckman

like analysts will a to wealth us, Relations. Ann, from of Tyson Foods good delighted welcome Bunge we Head others. welcome Ruth I’d Bunge’s Bunge joined new for relationships today. Ruth I’m have discuss new have Ruth honored CEO, among Ann of Ann and our in industries Investor a and team. to be to the opportunity to you, and Thank agricultural and in and experience investors first, March But and to morning. Wisener, her asset the I’m serve brings as with food great Ruth lot to a ADM and Ann’s

company’s operations. and underway organizational last announced This to We improve our the the we cover we and already efforts moving why today. business to want with I’m I to quarter, changes are forward share on about will important discussed priorities we you prospects. up the then morning, that I continue aggressively ramp excited some

our will then priorities, up additional first it provide will for our we And finally, quarter Q&A. We and then strategic open results. detail will review Thom on

commitment focused the several visiting and from and of know our getting close feedback and to past Over across with received months, the valuable many seen I I’ve better America, the globe. on the leverage how how and knowledge, into their how South segments of operate. our improve depth of our up gained I’ve by employees’ In complement each Bunge to better people meeting on locations those business U.S., of Europe operations I’ve employees assets. our our some passion we going relationships our success seen we to our insights also ideas new and to business forward. use other can the

oilseeds we us existing Loders a both integrating of expected, is in our For and become products to Croklaan into example, customers. as had new supplier valued oils. powerful global opportunities portfolio to additional services and has a Bunge franchise and legacy giving

when provides structure focus structure new American speed and We Combined on this opportunities the regional platform. in costs We distribution processes by renewed transparency we the across and model systems, evolving one execution. support our in of drive accountability, requires with This reduce people To internal and announcement morning. detailed as simplify deeper our our on footprint, operate, this aligned. how geographies this, This us scale generated shift number grains separate a execution network and and and milling can largest with a the will key are our worldwide customers the expertise. execute level footprint, greater positions and we’ll scale better achieve oils unmatched a from organization. the operating and regional South to structure, a new other new are world and with global our crusher in current we’ve strong and

this product As be aligned processing management assets, part will our handling reorganization, global associated the commercial our our and management of flows around and with optimization activities of risk business. physical

to Officer. enable Loders now as Neppl potential. the Bunge here. Thom’s a world-class contribution stay on will John. worked we’re Competitiveness business addition, expertise including great Also significant key and month his transition His he John Hyle, our and Kathy In roles and seen, been John ensure that you I supporting at report Financial team Croklaan successful in make with Thom positioned successful track our and have contributor the directly its months. many will role financial his new ensure a want fortunate me. our express Thom joining end Boehlert to years. us to Chair, food ingredients to has Global full him as for appropriately my with also me past will to is have spearheading this Board assembled. smooth will want to for industries I be to of Program, to the Bunge, a personal over record new agribusiness, Chief and the in gratitude a several I in achieves

X Together, talented I discipline. against the the optimizing team. bench and have we’re deep strengthening aggressively driving priorities: key within and a our full financial confidence operational businesses, our strategic portfolio working in performance, and have We

not our while and utilization performance, facilities operational year, missed we network last full opportunities market provided at operate sound. physical the did the and our plants Regarding are

the how have the team value clear, and manage Expectations risk. the to are rationalize external internal portfolio. to worked better Through resources at I’ve inherent we with I’m Over specific dedicated very pleased level the process and teams of we engagement. the established last X tighten up assets the portfolio optimization, and of months, and operate of with identified

can. and hear eager will and making you’re developments We’re on ultimately returns. these improve we we will to progress more, projects, share and We when information which earnings know Bunge’s additional

our our and reemphasizing working be are discipline on capital will strengthen controls continuing spending. priorities. financial and We capital future strategic Any to aligned investments scrutinized carefully also with

project to execution capital growth am we think our that not portfolio reluctant in any we Program. reduce through with by on improvements spend help way long results gone be and differently. have very funded I achieved costs, simplify on pleased Competitiveness Global us will how We operating GCP to changes. what or a On business already is has costs, work

need model, this We the get do key our to months. weeks our a to the be, that’s and momentum, industry. to our for a We coming work will they use focus and operations cyclical develop nature to operating the with processes structure cost over still have along changes and of to where

However, and and I engagement of company the am heading. encouraged the team by is direction the energy the

they in line results, QX Turning largely with expectations. to our were

a margins Oils results ownership the U.S., by were were year-over-year driven Europe, in crush Argentina and quarter synergy better Brazil of partly China. and Higher results Loders Edible Soy continued offsetting in weaker and full in benefits.

at number in what has full Based year our which said, the we are in that of in view a That severe operations unprecedented with addition, not facilities from North levels changed results market. February. want on operating on team, American factors good the very our XXXX I weather despite shared current the In commend logistics kept U.S. there you consolidated market to disrupted conditions, and

U.S. recent of largest to protein be supplies full the herd. entire memory, caused a fever has of swine African disease remains seen. animal decline equal the decline in to And this swine the First, impact

forecast Second, the X, of as recent will record inventories high. million USDA most a soybean XXX exceed suggests September global tons metric

how hands of the in remain discussions inventories patterns these U.S. the marketing evolve. producer future producers, affected of by most be Additionally, we trade believe China and will

While now potential remain Thom turn positive catalysts the the to these I dynamics will through numbers our greater create the globally and detail. diverse call over should timing of magnitude go unclear. the for these in benefits footprint, to

Thom Boehlert

Thanks, Greg. everybody. Good morning,

EBIT million Reported would were an margin in were charges first quarters EBIT in to by of the per EBIT primary adjusted Notable $XX in was the basis, with slightly XXXX both quarter Crush to continuing of $XXX was effects: XXXX, during crush to $X.XX million $XX Let’s first by quarter adjusted volumes effects, X been mark-to-market these share increase a first adjusted earnings primarily $XX the earnings Both in taken On EBIT in quarter compared than crush quarter Adjusted in first from for versus soft the by prior versus related to losses loss million Page of the of production; was $X.XX in pre-tax of Adjusting $X.XX $XX XXXX, the XXXX, the quarter compared $XX and earnings million higher $XXX quarter year-over-year. versus charge. production. adjusted the the the first operations, $X.XX in XXXX. results $XXX last negatively future were in Oilseeds, on approximately for of year. million related totaled mark-to-market $XXX share, impairment XXXX prior quarter soy increase per was first highlights $XX Competitiveness mark-to-market in and loss the the mark-to-market turn impacted an have year. million. year. the a to the segment was Total million gains to to driver quarter Starting and year. prior In the first prior million compared timing million million for Global Program Agribusiness, total segment related an quarter year. X.

first our were locked production due Europe by higher as quarter lower year soybeans. the Margins farmer were weakened. China in in before margins the Argentina, in portion negatively and but of last America, significant swine which effects of higher African retention impacted in crush of fever was Soy North margins Brazil and we a to

margins as performance results, volumes. periods. This Europe partially by offset results management and China. And Canada. declined only lower down trading in margins than as were oil both distribution positive Oilseeds soft in in offset higher also results vegetable crush improved Risk prices were and more higher rose

first by loss farmer first distribution both quarter quarter adjusted generated EBIT $XX from primarily Results low continued in year. million the the adjusted Moving Sugar and Croklaan year, reflecting $XX volumes estimate XXXX. a North export largely from by a million. & lackluster a retention impacted a the Brazil margins. in crop an million sugar lower lack primarily Ingredients the to negatively of million, export year Improved in $XX decline North America, $XX Brazil year. higher negatively swine quarter grain Mexico margins size $XX in tight offset with than U.S. adjusted $XX by news was and last million industrial due $XX somewhat China. and to from similar U.S.-China offset million and down approximately EBIT last we adjusted by to loss Edible last Brazil, lower the were was similar supplies to than demand lower the and while Food were $XX segment were was & Grains, decrease slightly lower Results of In and $XX were distribution on premiums in up volumes trading conditions due weather farmer ethanol were full in million African an South Bioenergy the that and ago of spread lower. origination Both more oil resulting in Oils ownership Milling $XX In of costs. results volumes million Agribusiness U.S. to million compared of had the the EBIT from $XX were results segment in Results reduced origination the margins in and and ASF. challenging and Asia last trade In results lower impacted EBIT America. demand by last were related year. reduced fever. to million, and was million weather-related year versus quarter driven during and prices total, selling results EBIT limited costs. amid Loders in of to margins disruptions,

were inventory As the sold the period, season quarter intercrop is only and the we first producing during our began was the from end sugar the quarter prior harvest. offset loss toward EBIT Fertilizer the ethanol in costs Higher the to of results $X for mills million driven The March. The more $X operation. year. lower was by of margins. our Argentine a compared previous lower million than

effective cannot which entities The a because Our XX% tax was unusually million. we in had losses high rate expense $XX certain of for the quarter tax record for was benefit. we tax

inventories. $XXX $X.X year. flow the approximately of operations for used is turn X, first year billion Cash the Slide was last variance for X primarily cash Let’s in to the in used cash The months to to decrease year-over-year compared highlights. due same the million a period of

Slide quarter On in compared net were increase X, Our from billion approximately of adjusted the $X trailing at $X.X as beginning working $X.X of billion due to XX-month increased capital. the operations funds billion. an debt approximately to

debt inventories. Our largely our finances

slide In readily net first accounting the our lease the during assets standard, finance shows, inventories of connection offsetting operating to XX% As marketable and the $X with new approximately was we more recorded debt than used lease billion quarter. the quarter. liabilities in of

Let’s committed to S&P access Slide policy, X Moody’s allocation and BBB- and rating our to of turn and capital committed by support comfortably targeting credit philosophy. liquidities remain a flat to were We flows. maintaining our financial to equivalent BBB sufficient Fitch. our We Agribusiness by rated and the BBB

framework, million. portfolio was liquidity our manner which the allocate the We CapEx, billion, end that quarter, believe most value. and $X committed credit we in undrawn cash we of Within available a $XXX have we of shareholders, $X.X and optimization long-term of structure had to billion capital and the facilities provides and at of capital approximately balance a

we discipline CapEx invest shareholders. capital in XX% dividends We quarter below million to have continued quarter, the spending, in $XXX acquisitions last, prior this XXXX. during investing compared not $XX average. and expenditures million of to We in the annual year the to first maintain in quarter Annual and did in X-year in $XXX are the first million paid

capital. turn to and on X return our Let’s invested Slide

Our X-quarter segments, core X.X% on was and trailing above Agribusiness and return invested capital. our of capital X.X% cost overall our for average Food

Agribusiness cost Our Foods above earn X% the goal on is points capital segments. XXX and to basis our of

announced in our addressable July SG&A of billion. program to we reduce by XXXX XXXX our by when Program, million the baseline XXXX, $XXX Competitiveness was Global the goal compared Regarding costs to $X.XX SG&A

to spend. the processes plan. shared driven of be XXXX of to we move services, year, expect in and incremental and reductions We standardization reach rationalization $XXX year million a this by $XX ahead in savings will indirect target The our savings expect million IT continued that a primarily in

savings. and into the the continue apply asset the additional company to discipline work and organization, optimization move identify we will As to we’ve developed the capture streamline

year to Let’s the turn outlook XXXX full Slide on X.

conditions, lower size and but geographic current crush U.S. improved XXXX. similar Again, will Agribusiness, balance should to in as other slightly the to trade by in outlook the results In year in higher and historical management we last later which would be soy farmer of U.S.-China averages. year. year results expect crops, Based results Grains are affect we softseed will a support margins of benefit with Actual crush selling be synergies China and farmer American lower of risk the impacted In our of will be rate margins margins. Improvements in business. the XXXX likely to and evolve XXXX of year the of crop, operate last to location in XX environment, market compared change of on the are the North will with be the forward Ingredients, timing Food origination harvested ownership the size Given & be Croklaan the the crush to results South months continue mix. the in year. margins increased the North factors. than the full Loders and versus XXXX selling year how from pace full materially over integration dynamic the oilseeds of than Actual of BXB trade softseed based evolution from and relations, the margin the America, among ASF, on would

more Mexico. partially addition, offset challenging operating in conditions environments Brazil be U.S. In Milling the will in and favorable by

full DD&A net of approximately a rate be million, of approximately lower in to in slightly last XX% Fertilizer, on $XXX $XXX we approximately CapEx a significant to we $XXX to year Also, anticipated range million of versus Bioenergy, the earnings. to million, expect of improvement year from continue $XXX expense to to XX% in mix effective million range of tax in interest results expect XX, Slide results Moving XXXX. breakeven, the the based and Sugar be and &

since now the end quarter quarter. outlook will of and market expect a and I timing lower Bioenergy changed crush This quarter. differences, & driven first first we the The results first in quarter, factors. as environment turn be Sugar to which determined second does as result be seasonally quarter. in lower would than quarter. the not Fertilizer significantly include back second overall results Regarding as be in we would the slightly to over seasonal spending the of any Agribusiness And expect losses new we or of the timing call prices are has to the had similar by expected the Greg. not F&I of mark-to-market

Greg Heckman

you Thank Bunge. the allowing us internal of leverage underway have across joining structure will increase expertise us and and The changes accountability we help our again simplify today. for our to processes, depth

priorities, tangible We And shareholders progress open with our which are line against making that, will in our questions. result strategic benefits the for operator, for and let’s customers.

Operator

The Instructions] comes Suisse. ahead. Robert Please first Moskow [Operator Credit go of from question

Robert Moskow

Bunge, historically, think were thank footprint. authority, was to a company of leverage Hi, There of questions. the presidents for lot a and its probably regional Greg, had that run on basis. you very who the I global limited regional capability

model? change using model talk shift that potential little that about So are risk this for you. require? you as other shifted – the successfully execution ag can have well, business comp peers as talk you yours that the like a this reorganization Are about can also? bit companies And there to cultural a will this of are you new you Thank to

Greg Heckman

to help accountability performance. is through This accountability speed a about simplification, and that. and is lot speed. simplification of going are we Good improve looking to And morning, Rob. This and it’s about

the margins. markets customers drive operate people that we to our markets, customers and that that going assets are and organize and around and serve We the

Robert Moskow

cultural is big for whether you the a talk Can about Okay. company? change this

Greg Heckman

acquisition eliminating has definitely Well, has at positioned Global look moved best when Croklaan, matrix Bunge that been Loders change. But a regional at the BXB Competitiveness company then think platform years, the the to I would you there. you if platform, as X so decided how if company the been they functions global on on journey the Loders, the cultural company look is had And that the a transitioning of last the operate. Oils global. our the And the Program,

lot a over So, there there’s them of success last already couple a been X with behind shifts big of years. the

So, way. to was started the the was time go think and evolution all it I

Robert Moskow

one operations now And Bunge’s Edible mentioned to Edible regional shifted great. Like or is kind Oils Thanks. of like When that there it? does part say integrated or Okay, to are a you Oils that has and global operating heritage follow-up, of you now it’s directly areas Loders that platform. it are will report operations? with this Oils a heritage a still from you, that Edible now a global Bunge’s of is this business separate that mean

Greg Heckman

positioned global team as a The Yes. it platform.

operates Croklaan The So, be legacy and Aaron. reporting under he’ll platform platform the me. change Bunge Loders there. one business-to-business to as change is only now JV No our Oils

Robert Moskow

I not? that brands asked Brazil down the because to operation in is consumer is like of retail network like or separate reason even I down bottled it have still the to this some oils Okay, that doesn’t like guess part kind or of a get it attached or it gets to level

Greg Heckman

to oilseed value attached chain. that’s No, our

has speed and our things model there of to our decisions chains. are clear these certain and value at be business our of, are for attached And able are very commercial even across make accountability being our all right executed to and about that always locally. able being they to network a part shareholders. for customers who of course that’s the the global businesses, in getting those In business, So

Robert Moskow

I Thank alright. will you. Okay stop there.

Greg Heckman

you. thank Alright,

Operator

next Please from Adam Samuelson The of comes go Sachs. Goldman ahead. question

Adam Samuelson

thanks. Good Yes, morning, everyone.

not much to just strategic businesses, was how sensitivity first, just earnings terms optimization dig framing how there for in a way So, be, what and be? what in portfolio of I to could more it’s those reasons. terms capital Greg, wanted guess identifying that were, multiyear your of average big that little how it frame that businesses specifically kind and some any invested I and of in But bucket represents, get of the an changes, bit could to whether portfolio remarks illusion on actions the big of those

Greg Heckman

Let me we forward. how the moving walk work you are through that

external and prioritized able in internal can three those what into you’ll if and So, what first we’re we do. we projects first that are to is buckets, to want do we work we will be resources, bucket have it. dedicated underway. we’ve taken hear our you that all between and will bucket when and share about the And things know that the And first and well active

to And second how we’ve late The that are the do. to it on in are do two order probably paths shareholder we’re about made things we we’re create bucket decision stage between in value. now, the where a what most going

those And things And complex having late the analyses where things got those. are stage, stage more applied a may whether some to maybe strategic or are so are and and resources are ongoing moving they’ll active in we’ve be and little bigger third in the be a question. that that then additional stage the

kind of right frame to that’s we are now. where at So

Adam Samuelson

of an really even op at that a businesses? those how first frame big group high you’d of especially But at [indiscernible] a at least kind not big Okay. is, if point just how know where level that

Greg Heckman

No.

can’t that Just right do now.

Adam Samuelson

unclear. still those you how could both an trade Okay. frame from into over and the the ASF today shifting year perspective of U.S.-China risk of is exact opportunity and and the is each moving a approaching hoping the balance company obviously, was of the XXXX. But the just I macro, outcomes of And just and timing between lot gears the appreciating between then on world pieces that in and

Greg Heckman

Okay.

ASF. start Let’s with

we the tough. the timing really and magnitude the of said, impact, As eventual

going publicly being and to our to going across of of are And scenarios. over the looking provide we’re so, you’re just long should believe be we’re information willing seeing we to a running some And right number course, the predict try then, to that said, our tailwinds, say That that. teams everything when portfolio are us not term, have. seeing now. the we that’s not that but We with

Adam Samuelson

U.S. And China trade? Okay.

Greg Heckman

also a you is and of timing U.S.-China going to the know the knew either about timing, don’t issue. you’d what know Even the trade, a to that’s need be, if content resolution. outcome we

think a has job a at done in the difficult in and portfolio the that of what’s our earnings scenario. pen from to team very our and So that any company good type the protect environment we risk of of ensuring risk continue stroke I again, also manage exists in this

got So, we’ve no specific on that. call

Adam Samuelson

appreciate pass I it on. that I color. Thanks. Okay will

Operator

The Please of ahead. Tom next question Simonitsch comes from JPMorgan. go

Tom Simonitsch

Good morning.

Greg Heckman

Tom. morning Good

Tom Simonitsch

to retention in You from beans you do by QX mentioned South America? farmer And of your more results. color region? expect selling some of soybeans managing how you provide are here? How supply impacting you farmer Can just evolve

Greg Heckman

Okay.

Our little of against weather dry have And soybeans and the go up on And coming the well of he’ll at after to financial a great marketing in down. to the forward. farmer things QX, slowed crops really American The doing QX. has he well of think, then, need. farmer’s by get he’s a be waiting be And team price, the get wheat good along as we Brazil, America he’s think to know the team and possible a historical In I make managing upcoming have South a retain a he’ll there is then got early his how and field pattern he’ll turmoil corn has continued in hedge marketed get look great we driven marketed. hoping very and The majority farmer we’ve using busy. course, choices. who’s ended and his he’ll a into that a and and in and footprint planting election some an Argentinian probably we what we what job with good

Tom Simonitsch

you see through fundamentals That’s could softseed most the maybe And you outline region? margins downside through by of walk this the or the upside crush where rest year? helpful. And also,

Greg Heckman

like calling together. then off I’m the now. change plan be business any we just I’d And looks quarter in lot when and the last overall that as right last we what a year come big it the crops Yes. key year, saw to say not put later that’ll

Tom Simonitsch

I on. will very it pass Thank much. you

Greg Heckman

you. Thank

Operator

The comes of David Citi. next ahead. from go Please question Driscoll

Cornell Burnette

for Good is asking Cornell on for morning. This Burnette David. questions

Greg Heckman

Cornell. morning Good

Cornell Burnette

Great. Okay.

basically wanted to building you’re kind the holds. it forecast the just looking the and assuming for grain really off, expecting Just that on start Agribusiness, you’re like on margins oilseed of you’re deal current sounds here the kind the not strip sounds China. then in side, you’re I assume it that at crush of just when And that distribution with would like a side,

over the these to then Just kind it look a some wanted case? sense potential Does at impacting the because ASF time forecast to upside the know kind was related really for give have And that you of so, how if it the of numbers? could perhaps events. do deal and you China a of that kind of

bias than little a And the was ago. perhaps so where just higher maybe it months bit X is

Greg Heckman

come help last have mean back start maybe X. then to let first me with and me you’ll and I X, the on there the

The them I you’ve got think right. first,

is us and telling the look with market the move forward curves. We’re at continuing what providing to

that on and and So, traditional we’ve to trade. again, continue business, look And have correct a origination close-in share we said, they’re is. resolution, you then the no position together you’re until that definitely not of being market China in able staying programs longer-term the soybean changes then that things very put and very the the the flows to you to there. And and marketing trade we’re current continue with Because at tied, distribution distorted. that outlook as is disruptive to while if marketplace clear interrupted system the are U.S.-China there. to It’s seaborne got trade

Thom Boehlert

our really kind on at of a are so Let board course our China the correlated is not There well that’s to bit margins. a a But to has Argentine me directly correlated the look production really of crush, When production. as than crush and half Brazil U.S. board April. that European production as that very you in crush. our been board portfolio, just less over the little add to run-up and our

the board those and are crush lower So, moment. at margins than

when crush all on and So, has The prices we’ve can really overall market in outlook, that about change the increase at talked of recently the we’re based across look the we board course, But given pretty of the our in looking those outlook. conditions factors market confidence our globally, quickly. regions. at us

Cornell Burnette

And kind new has it’s have Argentina, like I basis just for kind Brazil, in just at for just points it of to basis think big in you saw of kind year. of that and at much really with the this crop not the to a a certain Brazil, Bunge you Argentina difficult equally Brazilian the market year-over-year the price so bit on was year, little would And in had that perhaps soy be U.S. like I you those then premiums maybe given didn’t thinking in what assume with soy then on with work trading about better regions. outlook

about So perhaps crush year? last of little the kind putting somewhat the optimistic to together, those a year-over-year factors margins kind South lower is are that business America you U.S. relative have to a just on But what of understanding transpired going structurally than South American bit X more just basis,

Thom Boehlert

last I are to lower I around compared the mean mean last was a year. historically year. globe crush margins high year

our outlook. So that’s

Our outlook year. which current the much lower than last incorporates, environment, reflects a crush market margin

Greg Heckman

better. this last last better which still going way. it’s than with market not somewhat is year get the And at a they North us that is inverted, below is now, is the curve saying, you to South while America South well that year could market America, look then in America, time, at telling If marketplace stay the below the little

So, bag. real a it’s mixed

Cornell Burnette

Okay, pass on. thanks lot. I it a will

Greg Heckman

you. thank Okay,

Operator

Stanley. Vincent The next question of comes Morgan go Andrews ahead. Please from

Vincent Andrews

is, maybe could of aspirational where And is some take the bit And management you sort sustainable Thank Greg, sort some of management little risk of going that power are of sort could your earnings what there the earnings going encourage earnings? volatility opportunity higher a And risk an risk touch when you. a a that. thematics? of you bring talk and per to could that guess you I’m it you’re of openly get to for drive philosophy sort a I more type would on to earnings are encourage and swinging in you target? multiple? aspire taking to maybe share trying Or on company’s those really maybe to model tollbooth you asking about out around encourage of just of of going want So it? sort are would to of demonstrate on level you you how

Greg Heckman

Sure.

and Our is talented short-term of And a #X. to Bunge positioned workforce. really fantastic is the what a full that’s get reach portfolio goal to potential

for that As have approach but assets we appropriate is which, got, that far company’s, through And talking as billions ensure maximize for earnings risk-adjusted of in, is of hour, we’ve risk dynamic available the but to make. will the an risk that a We base through capabilities investments. to that this this been earnings quite here now. right management the half kind job portfolio invested got phenomenal management, of asset about to we’ve we’re that our have the want are as use environment the last that dollars it’s the risk to operating

Vincent Andrews

margin maybe than were Is change that an can time, for get structurally farmer anything farmer pretty at what just the attractive the And And around if you even follow-up on much dynamic? noted waited about might beans sold issue there remarkable. that can accepting which to farmer increasingly. flow industry of report time I for improve you? of Okay. in the has USDA of selling how both the company the that Maybe the think you hoped been unfarmed, do if selling, which as you a was from that over it the sort farmer? if lower an you mean just of means the a and beans

Greg Heckman

to is end the Ultimately, is business, us supply he on his important for manage of customer the chain. an that farmer but going

the cheaply providing so, trying be we And helpful, of And of it. find we’re logistics, best to to balance as providing from insights then get system the it demand if and giving liquidity, as origin destination do as he using going possible. needs always and operate to try then and him our points to to

fun. be more to profitable that So, and successful. our industry try customers customer We all to we’ll a be makes continue lot need That this growing. help

Vincent Andrews

will thanks. Okay, I pass on. it

Operator

question from ahead. Vertical next comes Please go The Heather Group. Jones of

Heather Jones

Good morning.

Greg Heckman

Good morning Heather.

Heather Jones

morning. Good

your wanted start with I to I So, oil outlook. price guess

But you’ve to Brazilian outlook one into hasn’t the oil them, changed So, demand has your the increase mandate, specifically. overall the much. mentioned bio-diesel been delayed. for dive wanted least at that positive I company but some so, are of year. There drivers in But this

overall, can or factor? pricing that at has just other year the was all are if wondering you outlook the offset you changed your oil that Brazilian I things for think there for do So,

Greg Heckman

one called in out number takes and the of that of You’ve are doubt. puts But in here no portfolio. helpful was things there the QX a

So, out and we that particularly. called haven’t

is again I decisions And ensure doing commercial oil with this an to the that of this beans those what they our managing making that’s model of meal at is through the on part margin are speed. operating the is team capturing environment all and possible. we’re here the that dynamic and think the that focused in and

Heather Jones

to Okay. ASF as on all one I can things are, there demand understandably. going like discovering that period. Chinese for considerably companies positive you whether clear doubt extended ASF meal a pretty is And magnitude, down have talk and for an to talk you clearly when second won’t be question down But you to be soybean that and won’t is you is to that some the of been we’re and understand timing my

lower footprint how understand demand that ASF look? just us help timing, its you would for play with could forget even could with out how as So, China? How in a but existing magnitude, Bunge positive

Greg Heckman

important might the one so choose derivative I is to demand. our about a And probably signals back how ties of that just on second Sure. expand, animal go timing The say protein it’s customers. that thing we’re is we and answer Sure. to price then and into really think the that see has

why are thing tailwinds And farther out. that So that’s probably tough. those it’s the makes that’s timing

crush China. our is in of XX% about Now

being like believe expand of down there will the for majority outside some really as China That of we amount meal So, at that’ll globally the the diversified our down demand. of good slow where point and China crush beans demand with our meal is. going of animal protein we because that because slow be to slowing should be footprint down the

world, for there of pushed amount that’s origins beans our around And going crushing again, be are back again, margins. good exists. the the where As to should that the balance of

about that’s we’re So kind how of it. thinking

Heather Jones

Okay much. perfect. Thank you so

Operator

Ken comes next Zaslow Please of Montreal. ahead. of Bank question go The from

Ken Zaslow

morning good everyone. Hi

Greg Heckman

Ken. morning Good

Ken Zaslow

you have anything follow-ups contributed future, do difference else last think following potential question. to couple in are the reorganized how if X one on going in you over Just the that probably a if How the over That’s of than and way much of to is, a made questions, up would more you had the X the years? would the have performance my in last past your years? first you earnings that go

Greg Heckman

to ones. we’re you’re Ken, operators starting got us better. got we’ve better makes serve it assets So, the customers we I’ve and because doing with of believe to say easy to we’ve this our

the That’s That’s we at trying the thing we’ve would to to this talked be backwards. the full decision-making easiest portfolio. commercial ultimately, mistakes be look So, and potential going easiest would self-inflicted unleash avoid. why about to the look able to at about faster thing that of kind of

have a be don’t I number It’s you. for And more. to I continued, guess. So,

Ken Zaslow

Okay.

bucket analyzing? not portfolio buckets, we something? what in you percentage figure right? are if X category how question the the So, of what difference can some which in versus guess the and you’re the second XX% doing you’re you that? asking to Is And that bucket in where Or The break there to way into a to active up those is, you speed of there’s X not easy still actually trying that actions, X, on a out I still which give are right? in the probably have perspective I’m what’s that? timing, start fair I’m that we’ll you see are ones, us third I XX% thinking active, in but is, when on

Greg Heckman

No.

people in right. only that dedicated internal working bucket, it, when And we say active X going timing bucket got external bear. ongoing. things The are resources to to the not first where brought you’re their we hear and as conversations You people projects on dedicated got about we’ve I

you’ll So, we’ll the those ones hear first. about are

Ken Zaslow

Okay.

So, then... bucket saying? there’s X all Is in what nothing There’s bucket that bucket point, that you’re and X in nothing and this that you’re in yet. at

Greg Heckman

No. No, no.

have a of number no. in we projects We have a active X. bucket

the going on with active of conversations paving number We way change. now, going have are a for projects way on which

Ken Zaslow

I’m Okay. wrong. on And clarification swine fever, me correct African if then one and the just

meal. So, China buy soybean obviously not does

by why over is on there I’m as outside demand wrong there’s the swine is expansion curious. to on if thinking is China is the one-for-one would benefit a of the of meal fine, demand actually a that African relationship So, And that meal soybean fever a decrease just be you? is I’m in not about saying potential it? a And net too. time to right an China one-for-one But market. global global soybean that prices, way

Greg Heckman

No, No. that’s I think think the right to it. about way

protein meal demand. without be to would geographically, but the it on was being that don’t get beans. to the on then soybean protein assumptions need by demand many species yes, one-for-one which the as if Of course, course, demand make where by switched got in the by it species you’ve species, of like-for-like then demand meal does China, and And meal they

So yes, I agree.

right. are You

Ken Zaslow

Great. Appreciate. you, Thank guys.

Greg Heckman

You bet. Thank you.

Operator

Robert And Please Suisse. have ahead. from a of we follow-up Credit Moskow go

Robert Moskow

the tone to And choice, of thought up I At world outlook but entire on the of the that that. see sounds they follow-up. that of the need a reasonable stirring if would of prices out thesis your will think And like provided for upside you make Chinese herd. your for conservative I depletion to higher. lot that margins for more than I a Thanks a can the maybe Greg, soybean the I that, and based it had plays to purposeful higher, meal much thesis today, livestock go would your business? go guess choice is think half much based up that back one And more for competitors year on a think increase trouble, a risk of supplies the bullish

Greg Heckman

sure. Yes,

correct. from we We and analysis taking lifecycle, are the measured thinking are done probably about a the basically have animal it’s approach You right.

the the beyond that’s the create to to we in to market got have we think then and price So get the XXXX. send signals animals and demand place

Robert Moskow

thank you. Okay,

Operator

question see of And we Morgan have I a Vincent from Andrews Stanley.

Vincent Andrews

taking for the follow-up. Thanks

the the that means on the the to they rest change in is there in import more China and of is back there and soybeans world. and the guess soybean meal, available need to if with ASF fewer the theory, herd question I the soybeans my Just go to

crushed margins of demand after crush So my do at be ultimately, question I margins that beans find meal perhaps sort there better excess but aren’t higher not higher, guess an that is, market is place the at than margins meal time? price? And maybe a indeed chase to because equilibrium if for to crush period around be of today could wouldn’t the fantastical in increase

Greg Heckman

adjust. will thing, think I the market well, have outlook you with and said that’s why Wonderful I the what think it works we agree it is. and you is it

So I think that’s right.

Vincent Andrews

much Okay. guys. Thanks very

Greg Heckman

Sure.

Operator

question-and-answer would Ann the our This turn closing Wisener remarks. over to like I concludes session. back Ruth to any for conference

Ruth Ann Wisener

to you time me. follow-up questions, reach if to for have your out free thanks please And today. So feel

Operator

for concluded. has conference today’s Thank now presentation. you The attending

now may disconnect. You

Bunge Limited (BG) 9 May 192019 Q1 Earnings call transcript