BG - Earnings call transcript Q4 2019

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Operator

Good morning, and welcome to the Bunge Limited Fourth Quarter 2019 Earnings Release and Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded.

I would now like to turn the conference over to Ruth Ann Wisener, Vice President of Investor Relations. ahead. go Please

Ruth Ann Wisener

and for operator, for us joining Thank fourth thank quarter morning our earnings this you, you call.

can as accompany Before GAAP posted we that discussion. Investors to know Reconciliations our Investor comparable website non-GAAP let to well. in at our These section on our bunge.com of get started, directly we measures are I have to financial want most be measure the found website Presentations. under you of slides the

with to slide presentation forward-looking you performance and remind to that concerning I'd actual encourage Bunge's the could cause risk and today's direct like and materially this these differ conditions. that factors. with statements financial X SEC in you that Bunge uncertainty. to various future includes reflect provided file additional These factors results has those to review to subject and we industry events, information presentation statements contained from you forward-looking in are respect current view to on its reports

On Bunge's John Chief the Officer. Executive Greg Heckman, are Chief Financial and Neppl, Officer; this morning call

the turn now I'll over to call Greg.

Greg Heckman

in Ruth Louis morning, Ann, and headquarters happy morning. We're be this the you, call our new everyone. joining from Thank to good St.

started. So let's get

provide depth into you see overview through the X, for fourth our I'll on over XXXX the go up questions. we'll John, I'll our priorities, of agenda more the then key open your line on call. for it conclude quarter before our and handing XXXX performance. lens today's who'll an start slide for On can then with and outlook to accomplishments with the I'll some thoughts of our

XXXX, around executing rigor, and parts our the performance, against the portfolio things discipline to took great and and we We face in excellent our operational did increased moving externally. turn and an under allocation. made team let's managed the that, many effectively financial slide and improved of complexity optimize X. capital we our to substantial especially progress internally We priorities. drove both In key action the control With job

On were the total five crush operational and volume in years. highest utilization rates performance, past oilseed our capacity the

Our us These difficult the XXXX to industrial the that lowest markets operations helped and frame. when improvements same opportunity. in capture sunseed and time weather allowed we soy in unit margin, crushing more had the achieved us costs

We've We'll end work the with moved into and model, simplifying we dramatically, about toward operate from number a as pools fully positive common the of of operating aligning goals insights a improved QX. that, rather the to bonus reduced headquarters We and With incentives regional feedback be structure a the than Bunge. of received our global together to internal move whole St. Louis parts. moved to we collaboration teams of the clear incentivized how result. evidence shared efficiency, by

Our new allows to on model important. focus operating us what's most

more Our facing and working ends both results on business customers, and on focus accountability. better with chain, one distractions. the of as value and team able business driving the short, we're fewer to operating relationships better internal visibility In farmers while

Moving slide to X.

our an Bioenergy against substantial second the the margin to While We made end finished substantially Brazil. assets announced other our continue quarter. and we've manage to our in completed improvements be agreement by of also with with we to portfolio, Sugar to opportunities goal joint execute the to & venture BP identified XX-XX sell

repurchased business. stake U.S. our in Recently SIRE ethanol a producer that

facilities. milling and seven also other our smaller completed facilities Brazil, transactions, utilization We South idled American Eastern in optimizing while closing improve wheat in grain sites capacity grain footprint two also idled several grain several selling to Europe, by

previously $XX continuing more financial established million discipline Global we cost capture savings from Program and XXXX, efforts. X. increased our Turning We've work approximately opportunities. are our our from driving In identify additional opportunities our savings to Competitiveness and achieved recent slide rigor, in and to savings

XXXX, more took operational we portfolio Bunge is actions improvement getting opportunities. and streamlined the sight with with Combined in to line additional of

market risk power appropriate and Bunge with and management, did for allows capture in as This the a quarter. earnings on approach also power We This we're of the especially available flows, provided risk our us true, better they earnings base. physical is taking focus global the during the by financial our fourth the within. asset operating change to changed to approach when environment conditions

testing end, project by reviews. pursuing stress capital to allocation be as strategy. committed the analysis the process deployment a result will high-quality well disciplined front as decisions deliberate Capital anchored We're on and a post of performing

to next certain in our anticipated. had running earnings we we're QX, margins assets harder, than risk managing Because markets when slide. we the earlier better Moving better, in delivered improved while

Looking our expect we we remain what to ahead to good feel XXXX, to our transformation challenging about to and adapt and volatile ability environment. a

QX ahead. will us that We move momentum of of out have help a lot coming

with environment earned current account visibility we the Meat and Beyond of on when back expect gain And year, the items, XXXX, of Bioenergy be to our taking margin in notable lack the & in broadly benefit and into line what half EPS of we the into Sugar segment. the XXXX depreciation excluding

financial to XXXX over us With the in that, walk I'll detail. and to outlook our hand results John greater it through

John Neppl

and morning everyone. good Greg Thanks,

on Let's turn earnings slide X. to highlights the

of per $X.XX EPS fourth Adjusted earnings the a was $X.XX compared $X.XX was quarter fourth prior year. $X.XX in of share loss the from in fourth loss XXXX. versus quarter continuing in a operations to quarter the reported of Our

results various goodwill Croklaan. Loders of and reported which to impairment the million million million $XXX Our partial the on acquisition in to of initiatives recorded net of charges $XX included approximately $XXX portfolio related

slower and forecast deal. the although associated our we synergies, majority acquisition We making a on than this have at them are completed pace and we integration revenue we with achieved synergies vast had targeted when of are the achieving progress we

is not our event. unique view And Importantly, its goodwill long-term on has -- or specific impairment our potential. annual business this a was asset. by this Loders the the write-down triggered positive not changed charge and a of result test now

the segment or the year. EBIT adjusted our year. the prior and was versus in EBIT before basis, Total Higher an segment segment compared million quarter quarter, in improved $XXX earnings and Agribusiness oilseeds adjusted the was $XX $XX year. was chains. grain On million managing in last results million interest in EBIT million in execution, quarter $XXX taxes $XXX $XX the prior total throughout reflected to million million in risk value particularly versus

results and in Oilseeds, In strong a soy particularly processing year U.S. Europe, reflected margins the ago. lower

improved and compared to when demand to oil supplies. strong results seed Softseed year last due

reversals our third quarter impacted $XX which contracts, impacted on Oilseeds' results expected, approximately by favorably crushing were As negatively soy results. in million mark-to-market

crush the in resulted contracts. soy increase fourth An forward losses in on margins during quarter new mark-to-market

to losses were serve our gains and supply these on chains that hedges, softseed forward mark-to-market by downstream However, related palm our Edible Oils oil largely offset customers.

mark-to-market in a positioning. As to oilseed were distribution trading Improved net XXXX better results result, small and primarily we a balance. with only entered due

Grains, primarily taxes. from farmer In driven accelerated benefited local Brazilian selling Argentina, sales South as improved. management. Ocean results higher good positioning in change in were And farmers in freight anticipation increased by prices in export origination and results fleet a America. of

to Ingredients adjusted in of was million compared million $XX $XX XXXX. & Food QX EBIT

results North up South were million better more $XX $XX offset Asia, which by lower results and million year America America. of results adjusted than Oils in from driven last Edible in

year. to comparable were Europe in last Results

that in segment were timing Excluding favorable million differences will than hedges lower approximately year. reverse in XXXX results on $XX prior of

& Milling fourth and EBIT were for adjusted to year Bioenergy Brazil. the as lower million Sugar were reflect results of prior higher quarter ownership by quarter the In offset U.S. the November. similar Mexico $XX in in results Bunge's XXXX results through

quarter the well and increase $XXX as yields costs $XX agricultural drove of higher million ethanol is due year. sugar EBIT in the lower million and higher prior Brazilian to as than was that execution Adjusted volume. pricing operational unit and pricing higher mainly improved The

due Results prior to also depreciation Fertilizer $XX the $XX with as to in business year. million approximately compared EBIT classified sale. from being year held lower of was for primarily the when adjusted line of million benefited last

earnings Adjusting a effective notable mix rate rate with all tax year fourth was XX%. approximately report favorable to we as The the in lower-than-expected strong regions results rates. for items primarily tax tax the quarter for due was

slide achieve Program to of end of of reduction addressable a Competitiveness SG&A to XXXX Let's When the by X its company compared as baseline million Global $X.XX was XXXX, cost $XXX July its SG&A. turn announced in and SG&A XXXX in goal the billion. the to

report unaddressable costs, exchange, the inflation, variable business and compensation. other reflecting GCP hard of slide in target work plan. we the -- changes SG&A SG&A factors our our our savings line portfolio savings that With acquisition Loders commitment foreign and and employees, as achieved one expense of such Bunge impact one as Croklaan such what costs in bridges to the ahead this This year program our

reductions spending approximately million of one employee The incurred $XXX million this $XXX split life and The costs. the between equally of roughly execution time cost indirect program. of company costs over is

slide to cash Moving highlights. XX flow

For generated The XXXX, and CapEx funds similar and billion enabled reduce prior of flow approximately we our debt. from year. operations fund cash our $X.X to to a us dividend level comfortably adjusted generation to

hedge see XX, ended the finance our finances the largely used receivable As unrealized inventory slide inventories on were readily farmer our capital end XXXX. elevated QX due you at gains increases and on to commercial Working commitments. South year in to America derivatives than marketable in higher of resulting to of being debt we can in debt net especially bit with activity our commercial targeting accounts used in XX% primarily approximately advances, a balances

quarter revolving on $X.X credit & of we facilities last was the a billion balance XX end non-recourse basis of available facilities a term joint of approximately from facility and of and at million million. venture. Bioenergy Total slide result a all being loan as then a billion to committed we Sugar had converted credit committed to transferred $X into the to credit which cash billion quarter a have dropped $XXX $XXX Turning $X.X

pay facilities. and $XX received Proceeds transfer largely program company's debt and to commercial down outstanding were balances from received million $XXX BP from paper used a the credit further million under the

approximately to We this million our spending for original was operations total of capital guidance summary year. $XXX XX adjusted CapEx full million. year Moving million was From and lower generated from about which fund allocation. slide $XX of $X.X the

of This be retained allocated going We approximately that dividends $XXX paid forward. included Bunge which not with toward incurred Bioenergy, $XXX us million left we million will capital. and $XXX for debt to flow This working cash shareholders. by million CapEx & in reduction Sugar

turn XX invested a and slide on Please to return capital.

on the adjusted X% average return invested four-quarter overall, capital above well X.X% trailing was prior year. the Our

ROIC Excluding & segment, last X.X% our Bioenergy versus year. Sugar was X.X%

We we of not lag. we If make X%. weighted-average to is to capital Based believe that change remain reviewing our preliminary maybe been stated the ROIC our have communicate review, there X% appropriate cost of will use in actual we a our referring are will we more our than currently on targeted the that we X% or determine unchanged. forward, quarter. future of rate going higher Whether

outlook XX for Moving to slide our and XXXX.

his and in As notable the in remarks, XXXX Beyond in we the with Sugar items what Greg expect excluding we line XXXX, segment. benefit be to when largely earned & EPS on gain in our depreciation mentioned Meat Bioenergy

In Agribusiness, down XXXX, upon we to structure. based market from be results year expect forward full current

U.S.-China margins actual and sizes distribution evolve on the commercialization. crop trade agreements, farmer origination and processing based will However, fulfillment of

In year Milling expected Edible QX expect $XX to be which favorable XXXX. to results differences, and Food & similar Ingredients, be approximately we are to full XXXX million timing XXXX, negative to of Oils excluding in

to for the market down results by prospects In Brazilian and results have to driven versus In Fertilizer, full sugar Sugar and XXXX. versus year prices. we & similar Bioenergy, improved fundamentals XXXX better XXXX, sustained year-over-year be market particularly ethanol a to be expect strong

net $XXX effective the interest rate and For an approximately in the million. to $XXX million, amortization XXXX, of in and expense $XXX $XXX approximately range million, tax XX%, of of range of to expect we depreciation CapEx XX% million

comments. Greg closing With turn over call that, to the I'll back for some

Greg Heckman

John. Thanks,

As we're faced in still with uncertainty XXXX. John noted,

affect markets volatile will any create on situation how long as have may developments year. continue to industry China ASF tell expect if coronavirus Argentina or tensions We impact U.S. uncertainty. to markets in our trade remain this the the to what as It's and and early too

remains So, that you it's can our why nimble. team see important

us on potential our focus our adjust honing allow to platform. maximize dynamics that industrial improving quickly the continue and market being to in disciplined about to We'll earnings capital changing approach global to risk operations, of to deployment management, working ways

internal team's great to the reiterate and a while I got our ability external a how year, processing want distributing significant a improving I of execution foundation navigate challenging this implementing and by to team impressed them. environment am who's We've appreciative with assets also change. and tremendous

and to forward our we work. strategy more on and to to we're detail detail I We're Day, changes those power which we them look at already seeing to late that. Investor come our also continue. more More with in our of continue planning sharing the as second expect earnings benefits We'll quarter. hold provide you on

with call And the open that, questions. to I'll

Operator

begin Please go first now session. question [Operator from ahead. Sachs. of Instructions] will comes Goldman question-and-answer Adam We the The Samuelson

Adam Samuelson

Yes, thanks. Good morning, everyone.

Greg Heckman

Good morning, Adam.

Adam Samuelson

to Greg, maybe little the John I a start hoping bit more on provide guidance. clarify was and color

EPS EPS So adjusted level, in first at the was XXXX $X.XX.

believe and $X.XX. benefit, Meat I were the sugar about Beyond

So, is when? you're a roughly wanted I that that the on as is -- broadly to EPS. $X.XX saying clarify and of just just

John Neppl

very and so was you're Beyond That's The $X.XX, close, really sugar about yeah. of combination close.

Adam Samuelson

super That's helpful. Okay.

asset implementing, the mean the headquarter just that some then, over into I year-on-year of that So digging moves what reductions from you've the there SG&A been within imagine XXXX. quantify benefits course Maybe some the taken, I rationalization, -- be guidance. of should the you've operating that

internal quantify the in little of about, can numbers? side the Oilseeds maybe takes unit, would Thanks. within sides bit, think the how embedded kind the of kind and some you're Just that thinking market you of there. And of the are the and Grain frame tailwinds puts of then, I and between some Agribusiness those two a

John Neppl

Adam, didn't sorry. side? you Can around your I I'm repeat I'm question sure... not Yeah. cost --

Adam Samuelson

Yeah, of the implementing you've over that Global terms continued -- so the Program. cuts just mean Competitiveness SG&A been the in of last you course as year, the yeah, I

benefits laid forecast. from in carryover you that I that versus EBIT you're you've those? that just some the imagine forecast XXXX your initiatives there I'd mean out? EBIT in XXXX, be internal would quantify benefit, embedded including Can

John Neppl

Yeah.

redundant I probably still of our know the associated we First, half costs first St. transfer think to that, the say with you to employees some year, important know of I'll got Louis.

the doing And a of around, we're rewiring. some execution

the in year, SG&A, I higher first we continue out. particularly probably those of programs at expect do corporate the year reduction the as We to -- a measurable will do costs have some level. run half next

from At overhead just pure this a standpoint. point,

about last to you the of run-rate the of the about million the additional If a beginning think we costs. basis, $XX saved from year end of year year

year a -- should into think throughout less And we I a have number the and a going than maybe heading bit year, hopefully comparable XXXX, little that. next comparable or

in we $XX million cost we cut as tougher. the gets of expecting year. somewhere deeper the million organization, deeper neighborhood next Because and bit are into $XX additional But, savings it a to probably little of

Greg Heckman

Yeah.

the mentioned The we're other work the all go portfolio John around thing probably the continues all first work in worth to rewire doing in that mentioning, half. the on, resources half. But here, first the also

majority it kind us balance changes but in that in come and We're target the forward. at of some second to the closed make to quarter, of the getting work. ongoing the those least able -- end as some to of what hasn't get be So with XXXX we're we're looking said, of yet speak with John our position run and has been of up. us a go the that the of And then by of a rate to to wrapped doing, which of will give position announced out

Adam Samuelson

Yeah.

Greg Heckman

the that's drill kind course during of of more we'll Day. into thing And detail, Investor also

John Neppl

the cost we year I don't I late start once we the base, of on, much be we'll the And heading the think, XXXX. half XXXX, end with rate revised end Yeah. of back of think at a out of our until get run -- into XXXX, should cleaner year. at

Adam Samuelson

lay of bit crushing broadly on -- out grain Okay. and side. different the the the the then, Agribusiness a just And just specifically, help kind unit just just assumptions

Greg Heckman

Yeah.

we've got half. And first pretty visibility that half say we've good out coming the the even talked, of we'd as XXXX, good into here. momentum at we've pretty QX look we first looks And got As positive.

half. I on really demand. And economic the very, very China effect the got challenge second big you've know think visibility possible, around flags little is, coronavirus, situation, the the it's then into the trade Argentina,

below year, curves -- seen. crush margin the outside not are And inverted. You've second half then of course we've margin is are of what soy got attractive. U.S., significantly definitely replacement last And margins in heavily the U.S. crush

So distribution that's timing big we're of of is course is drivers of lacking I really business, then really think the timing about the Phase the details, the Agri the piece. the and And And X. the inside which around products.

talk some delay maybe already coronavirus. due a then about, to And

So, that's put kind that of the we've key with. drivers this together

Adam Samuelson

Okay. I color. I'll Thanks. all that pass on. appreciate it

Greg Heckman

Thank you.

Operator

The next question ahead. of is go Simonitsch from JP Morgan. Please Tom

Tom Simonitsch

everyone. Good Hi. morning

Greg Heckman

Tom morning, Good

John Neppl

Tom. Hi,

Tom Simonitsch

than how synergies coming the synergy targets expected. noted latest you slower Can on just So, you are changed? and goodwill remind impairment on they've us you those

Greg Heckman

Yeah.

is, the to kind we that that and really This was up. trades that about of That we is frame that a we me only The be that -- one platform. in thing definitely once to were opportunity. want glad I asset of clear get were and believe wonderful value Let the opportunity.

deliver business going been fully The We synergies. and of to to business. have are combined team. continued on not had We've timing legacy delivering Bunge cost and Loders coming benefit able line the had we planned. those legacy targets. to top to had continue And as from one the the we gap fast as all of on as company market integrated our the We're

We we having allows and on oils done it's sustainability, a product we on trend. our conversations they record fats the years senior which It's have it's customers sales right in It's of position technical an on frankly, Bunge's capabilities, And us the this really been that I global was team table is just as with a adjacent value -- do the space working job. the in projects the and fantastic ago. and to are couple and at oils the presence. love and end-to-end wouldn't up platform. and because -- It's week value wheelhouse. last said, definitely our definitely business And a fats with

venture And fat our same the while one where put us system, Betapol space, nutrition, some extended to of we're to that new about our with with this important we work we're reduced our used year. launches We're this can high-concentration go. sugar product that excited award-winning less the And on allows the did sweetness. In Loders, infant really got confection we've and we've launching In companies. be a sugar for formulas.

line which animal we're got getting handful products replace And on beverages. to of global working plant-based has much investment, of to in much veggie activity, area, the then over a in a there. burgers fats garnered And range with so from so we've customers of fats some traction a

So, were the slow line this a we great while to top lot is delivering is shareholders long-term. property create in of value for this going and a

John Neppl

good And worth had I may was when overall still achieve think to we be driver pretty impairment year-over-year we the built the that the this inside did model a Greg, our business. but just growth of we shortfall that mentioning, really business, bought

So, the what when very quite at the expected level priced positive just growth business. of we not we

So drove any wasn't the review mentioned my take in look of remarks, separate annual again -- on event It the just that created it. that a single I goodwill. by our to driven the -- at caused was impairment, as staff but that

Tom Simonitsch

the quarter. just needs proceeds some just if allocation, Thank on shares? And What debt you. last you paid you from start Understood. down happen then capital to JV back buying this with

John Neppl

it's talked something about. we Well,

everything. and I have been up we're for I back and on a point. look hard as bought allocation now It shares this few a We think commented, to hasn't at priority years capital haven't a Greg taking

bucket a XXXX. look do about it's at and will so in we Certainly, talk and we

And table. for us alternative is we find better value ways find reinvesting up really opportunities is to a I it's think question certainly then the shareholder look the when if we buyback on good the by share can't capital. to create to at

table. CapEx. sort or We the $XXX not of an certainly capital. how or a or say at mentioned repurchase, to reduction, the we hold haven't as whether to we but exactly to fair -- have and always be but it's thing for We way million of any our earmarked have little share do we XXXX is And $XXX hard would sort right And if a we the acquisition of finished million point, debt want determine money plan I bit back other. all allocate going this opportunity for some signal to amount don't the on one have I

Tom Simonitsch

I’ll very on. pass it Thank you much.

Operator

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

Vincent Andrews

morning and Thank good you everyone.

Greg Heckman

Vincent. Hey, good morning

Vincent Andrews

Presumably share I If clarify you're undervalued. could you're run me be just for would power is an going us going tell I capital. and the it rating earnings think and repurchases your uses have of June. on your the that Analyst higher I to in mean, to thinking about I is way you're you that than stock's that Day what alternative at the guess,

today capital for else's So you'd at alternative and going which because think were a business? why versus a you be I buying shares somebody wouldn't presumably of your them out premium the paying discount best use

John Neppl

Yeah. It's capital and think – be now investors hear provide between shareholders plan our what it's always like and share and would now will that that a plan trade-off. our I a some – between agree. And from buyback better we Yeah, some on and clarity June don't. be. you allocation I'd like to to

to today for certainly, But then we'd commit best that's it how to and or us, be go-forward company going kind sit share strategy, equal clear and I alternative we're the have discussion our can't else make we into at to here you foolish here to that the really I anything purchase. airtime just to with say it'll develop we for with and as get so we reset capital. a consideration of that becomes would of and to many we're just it our hit going it not have look say, And part allocation. if take purchase the capital

Vincent Andrews

Okay.

Greg Heckman

have work, first operationally, in get the of that's of house, continue and portfolio in execute is boardroom. to the to and continue able strong continue business to the to our that be order execute our cash Look the then and debate balance to

Vincent Andrews

farmer John a Obviously, was towards capital. follow-up just that – year And of end and built enough. obviously fair in the That's Should it on part if ask why some I were flat the the reversal earnings of could the constant better. working Okay. XXXX a commodity underlying cash about selling of type should be relative to we forth? advanced so because prices in was and expect we flow just Or next how holding EPS year event? thinking roughly

John Neppl

Yeah.

now bias what we bit. on our at think we I we a based look today, it revert would – right expect do to

And expect so change working to prices next your be would in net your comment. capital all point. cash I positive we flow To this point the though, year with at commodity et agree for a cetera, else would being equal

Vincent Andrews

quarter. Thanks Okay. And much the very guys. on congratulations

John Neppl

You bet.

Greg Heckman

Thank you very much.

Operator

comes of Bienvenu question Inc. ahead. next Stephens The go Benj from Please

Benj Bienvenu

Yeah. Thanks. guys. Good morning,

Greg Heckman

Good morning, Ben.

John Neppl

Good morning, Ben.

Benj Bienvenu

you ROIC target. about Ask talked – about the

it want about about as as talked you capital expect You relates a earnings forward? components towards thinking are move the I the the contribution ROIC X% about from the the reduced of comes of numerator all of so your your Kind or that Would move ask you denominator? to you how proportion to target. greater WACC. the invested

John Neppl

Yeah. That's great a question.

couple a One So, the through actions the throughout is things. yeah, been there is taking we've of year. portfolio of

that's for get we here X.X% than an based crush if ton our look So think at X% that's purely you gap on year. less our this on earnings at a the about if volume where you to $X that finished X.X% to on margin perspective

get invested actions, to piece that taken perspective, portfolio this it. could over be look into the could year on half gap us earnings at the of we're in just we've the an there. going taken. we that up capital reduction puts it half based important made So revenue be Obviously, by a of driving as not on But actions we've gap that side, to is achievable try but to to it necessarily rely

been of Some been haven't executed announced, yet. but those have

I at we earnings. a view action, It's probably get portfolio would half So to our by to X% driven driving driven good goal be by to think baseline. – point this half

Benj Bienvenu

back ask of a want veggie the with had That's oil. soybean Edible Great. half And the obviously just broadly, more been of here helpful. kind the The Okay. then oil year-to-date oil, year about to in volatile but Oils business has market great market coronavirus. I palm the

view I'm vegetable could the give nearest you oil so market just visibility curious, palm the And extent if and oil the in in on to just us soybean oil you term? and particular your have

Greg Heckman

palm think That bit. the I in you had one is the last market what helped We rally palm if production, at price XXXX. also coming we that tightened tighten those time saw then rally tightened some all up And – with regions. is were dynamics has slowed the the keys deliver of same lower tough. supplies the same a that remember crush time – oil end on here The Crush together, Sure. that the the into at and into year of time oil QX. of pretty believe some we us could margins were further

there that's the in creating when mandates the at X.XX Softseed here things as the demand for you of of to outside are from look margins for positive continue oil gallons refining well, X.X going a biodiesel billion to and net got capacity billion be driving. a lot good the we've EU. a so then lot U.S. And outlook XXXX,

yet be is seen. to I demand, that's but think global the big overlay

Benj Bienvenu

Okay. Thanks. luck. Good Fair enough.

Greg Heckman

you. Thank

Operator

Please from of ahead. question next go Suisse. Rob The comes Credit Moskow

Rob Moskow

about quantify as to way impact. and your to business business I bigger if Greg Is the to flows, potential pig it it? thanks. Hi, rebound the I both -- imagine rebuilding of them sense make both also other? than factors. or African incremental it it fever been John, the those of there imagine conservative does think the through China be -- in one normal resumption for the for swine of any is on herd but you've Or a a is following of your would China, would then think trade I

Greg Heckman

quantify I'm not to sure it. there's a way

ASF done as it. China I we It back looks long was as herd that of in we of to think think liquidated. come get ASF, resurgence XX% we like that's don't about think the a on do

worst And some And of able quickly. that rebound then to some of seen been so over the people the we've demand have switch is sales poultry to in there. has X%, to improved chicken and the small hope

we're as and global glad of markets U.S.-China and and far fair a concise we've a fan that trade, trade, and I'm big doubt the of got that clear no are and economic but regardless team open As great it. running platform to always free this

outcomes we'll for not the to a guess in number stay happen. what's so continue going over of try And to and to position

you plus can at we the curves. if we up based right didn't outlook kind give the of around coronavirus. or look any as or to trade, look tried today ASF through on that drivers adjustments And and our minus visibility we frame you the you took what And really versus XXXX,

If challenges happen, to don't to want you ASF or you the you looked want spread. return things at the see wouldn't to China see

see distribution well as and to crushing you You decline on on you to you wouldn't also probably in animal run oil see which coronavirus want to see as overall. would tough don't And continue and trade these and uneconomically. a to disruptions margins wouldn't way volumes crush grow, meal And Argentinian then numbers for demand. bad that's want want to at wouldn't continue want see be high up run

annual quarter. would as now. to as continue animal to the just of wheat numbers side, with root wheat grow is means be goes as soybean soybean spread it would what -- we there'll want We On the tight. Argentina then flip talked talking seeing be tighten about not slow which for remain course And a see you see has of outlook the fed. it's ASF. that competing it been. do even no ends means demand it We'd the remain oil being less meal It's the meal. about away, to for demand. coronavirus not better up so we're right now continue and And next And flash is

see That reform We after improvement bit positive. year. last little the in economy was the a Brazilian of definitely pension

see to really and continue would good like for we'd continue and so constructive economy be demand. improve. improve would then U.S. the prices meat And high That animal exports be to keep which the And in U.S. be Brazilian numbers would to see businesses. of for to that good our all the

do if So them, -- for things root you be need e-mail list me the if happy there's to to I'd that. to of

Rob Moskow

if But little you of Thanks. rely just I'll one ask I transcript. think element can I that. on the

to I I demand stronger what oil you get… for I you want oil. said? would to tighten would that think be you is What you continue think demand said on would to Because root

Greg Heckman

Yes.

demand the By picture Sorry. S&D growing tight.

that's if enough. clear Sorry not

Rob Moskow

it. Got Okay.

Thank Okay. you.

Greg Heckman

Thank you.

Operator

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

Heather Jones

Good morning. the on quarter. Congratulations

Greg Heckman

much. Thank very you

Heather Jones

Yes. lacking you half visibility said I to clarify the say you for visibility back you wanted that Greg. -- outlook are Did earlier something Agribusiness is the good and in positive isn't half? first the

Greg Heckman

correct. That's

You just…

Heather Jones

Agribusiness assume -- know being right cadence about you thinking but fair half now you the given How when half year we're a be of little potentially is down? So back didn't that you how half visibility quarters point this thinking much Agribusiness and quantify about anticipating at to thinking I the in are up there's be first are that? should expecting down how going we would is the the out back it and play the to year-on-year about in

Greg Heckman

the it with one And the to to and thing being margin we've we another. is -- one the that there quarter thing and it from moving can that do seasonal area many move right business from know move fact can we our of We value the one one are business and chain across seen so this in another operate pieces. cyclical

really kind So like we're to full quarters. trending. the put where to year and I'm try That's why hesitant really around the the to talk of specificity we to

out So -- of the momentum margins of about about we feel feel as do we as coming the what we first protect outlook and kind that the in. to momentum look in talked good and momentum of we've to through half been we QX able

year-over-year prior year. first look you was QX big pretty If half

Heather Jones

Okay.

Okay. an oil. edible But easier to And moving then comp. QX on

view. all that were share I and bullish which -- comments your So

the you surprised to -- was the about timing So of run sort given about much everything outlook talked you that because but mean good. I QX about had language. effect. XXXX I And pretty similar that that talking not went good right guys it was probably year-on-year excluding that being you're mentioned rate fundamentals now of

just but just commentary quantitative much. me so wondering you wondering really commentary your because could And help the doesn't And bullish, as reconcile the two. sound then if qualitative sounds

Greg Heckman

challenging Well, seen been probably a maybe has bit in for the we've little Food been Ingredients. helpful Brazil. of the the for some while be flip things Agribusiness & side What it's would

takes the and there a are across portfolio. of number So puts

in demand know between talked I of don't think we Yes. from unknowns I about more as just ASF And number have are the situation. Argentinian if concerned a marketplace a that. overall we the -- I the the with Coronavirus -- better a look specific than

Heather Jones

built demand some from impact related commentary conservatism to there's So potential into Coronavirus? that

Greg Heckman

can to we not see is do through look you hope what we think I going and is what and to happen. we've tell tried what

Heather Jones

you Thank much. so Perfect. Okay.

Operator

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

Ken Zaslow

everybody. morning, Good Hey.

Greg Heckman

Good morning, Ken.

Ken Zaslow

were? is of been you profits differently on relative a you've on view Or how have if you was would done the off about what based not quantitative much portfolio or One when couple you've Just you improved of you change of that done much done down can level have said some your a to how kind think that? base where questions. that quantify sort

John Neppl

Yes.

way the or if that -- so shortly. about I I'll are that close go couple small close to had think here that going got you been here of that are a actions going that to the taken think because things we've a couple we've announced, actually

in those sold one mayo and and South and -- Now of that we margarine business America. our course announced of

going the We share would is an the going would that and price $XX accretion from EBIT both on be we've $X.XX, or accretion probably EBIT proceeds. interest around cost accrete to -- should we expect just forward lower EBIT more by importantly to million announced but on million, executed, driven -- $XX things

expect performs would side. that sugar at it of what we and the to on our assuming So earnings course sugar that's JV include

of at some opportunities. on do reasonable of then here we've we expect other look continuing And amount done based we're what course, accretion already. to So,

Ken Zaslow

the was said or low you cost low. the a was I rate comment And there is also that high and what about was something that rate. all-time all-time said first I -- five-year like was utilization thought utilization the think or -- that greater

interesting. was that think I

out, that be included all trying how So because the always in out played numbers. hard figure to I'm just that doesn't seem to

Greg Heckman

Yes.

that the model one and glove shape then getting And and some and assets positioned in get the are industrial there things. existing in really whether commercial and the not getting teams to assets about at for us is asset downtime, hand margins really to have unscheduled earnings working it's -- when we it's that commercial can to run the any are teams operating the whether risk how the so harder base, for in of run capture our that maintenance or

to global and this in being has the our system nimble much think I are and our especially assets there. able environment team keep the So, been flex when more full margins

been them footprint, fly. those of a as are overnight that's talked John And about, in as that made some but switch. the So, and out. a result model the the some costs worked unwire portfolio changes to not things Those organization then we've operating get team. flip close lot then we of that They're in from things are the the an stranded

Ken Zaslow

sounds if guess to least trying Yes, all profit I more into management actually costs buckets quantify that like million it seems seems the didn't I know agree. what three just $XX think incremental of up portfolio to there's how but utilization and there's to of like been blocks, It actions there's way that's internal I like. from through rates just earnings know figure out it at actions. is of has these corporate to for and a built out don't incremental of sure, what -- I $XX I million was building

Greg Heckman

to quarter what delivering transparent deliver and how to time being it. about then prove at try is going Well, by a do we real we're it

Ken Zaslow

How end bit the there of be that a still My your what follow-up done how of management that And return of the is invested earning to it? that? to is, umbrella Because that? really seems on by you it going question to to X%. be much I'm about fair quarter, portfolio Bunge terms progression the after in that the the leave... second might be expect under has when may think going end And we're your see dilutive of like capital is is to assets

Greg Heckman

we've done underway. that Those teams the pushing position the we to what by be do and review to announce Day when put the How intentions because, that what second finished said we been together Investor base. is goal and internally, target to to or end our today about things had we portfolio able clear and be -- in the our our to things as quarter, a asset talking we of about have were initial be against going seen have the you've Yes. that working list are and --

that to earnings growth run and to going We be and continue of about talk power plans. forward our able the

We're like That's out And memory the to That's continuous drive improvement. like now time is our that risk better. the trying get that making there things never have across best metrics management. team, always running platform get It's constantly in continue perfect. to or business improvement. they doesn't return and to GCP It's global to told just never and great have That we've as mean very our are and is chasing muscle continuous a they improvement a a challenging cost exit going we aren't stops. a hurdles either continuous the be to in challenging on line plan plans. short that a

running how culture just we're this becomes the the So, of company.

everyday it's an an it's event that So, not event.

Ken Zaslow

Okay. you, I much. appreciate Thank very it.

Greg Heckman

you. Thank

Operator

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

Ruth Ann Wisener

in day. for interest follow-up Thanks Have if good your And have you please further with me. Bunge. questions, any a

Operator

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

You may now disconnect.

Bunge Limited (BG) 12 Feb 202019 Q4 Earnings call transcript