BG - Earnings call transcript Q2 2020

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Operator

Good day, and welcome to the Bunge Limited Second Quarter 2020 Earnings Release and Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask question. Please note this event is being recorded. I would now like to turn the conference over to Ruth Ann Wisener. ahead. go Please

Ruth Ann Wisener

and operator, for us joining Thank thank morning. this you, you

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

this John over Heckman; Officer, Chief are Chief Financial the and Officer call Executive to the Neppl. On turn morning now I'll Greg call Greg.

Greg Heckman

and Thank everyone. Ann, morning you, Ruth good

some all will fits to second pointedly month, second an line that challenge with This our safe for and and also who of a thinking about questions. second John, like in resilience quarter we're well, facing. and the are X, the we're Turning hand half remarks business for thank performance. into during you call. hard healthy. how quarter, I'll hope very start over to update discussed on team your with by I'll and to families of year, your can on you their all colleagues focus. work, before our to see wishing overview I'd how what slide and opening start and last I the want is today's more the the up our agenda close we relentless with share for it detail then go and

was of Our a forward getting to we've XXXX be I'd meeting job virtual like prouder. starting businesses slide update dedication to a core leadership a first the to the their demonstrating dialogue. team all our we and reflecting half With We I quarter testament positive with going done, the business results continuing quarter feedback are the new business the joined and our operating across delivered of very benefit X. to strong who run Bunge with of that, operations of appreciate the intend and we second all let's forward couldn't Performance to for us in and turn way look last month. Last, to you, the mindset. model, received the excellent. thank

on we earned allocation with generated three continue including still the platform, costs unplanned collaborative for approach the an the Brazilian effective We customers. average capital We of margins the our crushing, half grains trade of years. ton. realized to from year and with Brazil Across use traction devaluation oilseed, operating focus gains. were risk to the made the with benefited improved the soy costs. with reversed But market at and decisions key period of record of we execution the strong momentum nimbleness crush gaining utilization able XX% risk quarter as global disciplined were reducing deliver prices free cash the innovation Average first to flexibility $XX. exceptional new & expected benefit business local from execute had being refining farmer we In a on and our and to our in Food in Ingredients we of capture coordination outstanding $XX Agribusiness in were exceptional execute demonstrated and to us and risk we year-over-year flow, priorities, as management great and portfolio every the gain active we metric capacity, in strong and of downtime while increased with last part working current as performance In hit management margins opportunities, our management lowest selling allowed environment. solid as committed was the across bottom in line per capital in top and continues flows, of about capture this and quarter in replacement the business. performance timing on reduced soy Our the and essentially prior had quarter increased above-average performance real. crush losses because crush results. capacity

our Even strength diesel renewable and foodservice. areas new growing off producers, as wins food in CPG service a food demand result the around customer in as those with world, lockdowns offset of the impacts processors including COVID-related fell

our increasingly to chain of As turning can forward. innovative provide continue model challenges Bunge, to because are value present for customers, our that solutions benefit COVID going they relationships resilience to our continues will the

our noncore execution, the produces entered tomato that business commercial the sell small to backdrop recently We've an continue food we the to and Brazil office results also very remote in focus into optimizing headquarters With are In pleased interim officially we're with portfolio of agreement situation. sauces. well-adjusted to our our short, Louis quarter, asset great and and the momentum. closed our with working White very St. overall pleased on this to and Plains

the higher. puts to outlook. year the some and over walk who'll now financials I'll for John, Given and is of full you it outlook turn to related the through the our QX, now takes strong our

John Neppl

Thanks, Greg, and good morning, everyone.

earnings updated secondly, differentiate We that these individual to we we did noticed to press have from wanted format you our hope provide segment businesses beneficial. for our release. a businesses; for performance. and non-core find reasons; our format may You changes of couple wanted more detailing We this of we a the one, clearly core cleaner

Now, highlights the on earnings turn let's slide to X.

in $X.XX Adjusted quarter second second reported $X.XX per the of EPS versus Our second the quarter $X.XX the was earnings share XXXX. in to year. quarter in prior $X.XX compared was

include million EBIT or where is charge, compared XXXX in Our year, taxes by $XXX $X.XX to million EBIT dating back the deemed a quarter last second core $XXX Agribusiness prior to uncollectible was driven adjusted interest as settlement. primarily now segment $XXX that receivable against a of and year. results million was of to anticipated aged in the related $XXX EBIT primarily in million net Adjusted earnings provision an before results legal part an

noted, Asia, results by lower actions first Europe, South partially $XXX in reflected soy capacity. offset This capacity execution America. Oilseeds, reflecting risk lock expected strong and value and to the in largely of were driven chains higher took differences processing related margins we were quarter margins also results and flows. In processing in mark-to-market in the particularly North by in As the trade throughout regions. was benefited higher America, all China QX managing reversals timing approximately higher million soy global Agribusiness Results strong gains. the from Greg committed crush quarter to new in in results

sales of reported oils the into million open processing second our You we oilseed customers. related to $XXX losses recall hedges to timing of carried quarter downstream contracts forward mark-to-market previously edible may against approximately balance a and

upon a timing losses of contracts. these of reversed executing in million second $XXX the approximately portion anticipated, these As quarter

open the to and had driven in the driven distribution as on America to Freight at quarter approximately a approximately ago results the addition carryforward North global from a In excellent trading quarters. year of positioning. improved million Brazilian to devaluation foodservice Brazil contracts margins recovery $XX farmer COVID-XX-related Higher on contracts Ocean also we in restrictions and gains in a business. quarter balance prices observed $XXX net Origination gains caused hedges in period. improvement well recorded most of compared on as the at in benefited steep of also impacted the as which oil by quarter oilseed to of a due the less the vegetable as related beginning the increased open the discussed by gain This In we selling in decrease demand from our the primarily call. grains million origination drop quarter, of strong in and favorable margins in million quarter. our and crush challenging during execution biofuel Edible earnings of were bunker result reversal mark-to-market a Results prices a driven fuel the Oils, of by quarter. timing that end second the new reverse negatively improved than areas by of with real. $XX mark-to-market first rise will first of local showed coming reduced

biofuel our from million Sugar ventures quarter segment as for and increased performance new and as purchases of from North higher primarily joint which demand higher By the and Brazilian driven to with our quarter more than consumer refinery total well corporate million regions. of demand demand. in reflect Argentine higher XXXX. are million Bunge volumes Fertilizer, XXX% of reflecting accelerated the Bioenergy & as processors improvement Other with along from XX-XX Beyond corporate from reflect food other. improved, recovery with $X in reflected Milling, our results results partial in combined Corporate second customers venture as which developed, increased XXXX gain channel of quarter for operations and resulted results contributed other This of as BP. that Brazil, in year and growth by $XX margins in in higher $XX income In compared December costs margin expenses all joint primarily earnings Bunge Meat. the lower the we food However, retail which the driven results ownership in results of and margins segment operation $XXX the and noncore from decreased mix. by our America our of period Bioenergy as EBIT and impacted local well In this prices. lower Sugar investment ventures prior for from costs by In in venture of negatively improved This anticipation million to in in expenses processor adjusted offset food contrast, were business benefited higher non-cash included share In & farmers -- a segment,

approximately translation in contributing primarily of debt lower results the Brazilian the $XX by Additionally, on the venture global of a quarter one-month on real. the million decline results to prices. foreign drop venture Also were driven were dollar-denominated by of losses in prices, due U.S. joint oil to lag. the ethanol joint exchange earnings driven depreciation of in reported Lower are Brazilian

ended expectations. line our Net income of million $XX was with quarter XX, expense in the expense tax For $XXX interest million. XXXX, June was

This six. compares slide Adjusted SG&A our notable SG&A year. QX to prior turn items. the Let's slide to excludes

in lower than $XX such million increased year, actions restrictions million focus due to travel $XX For actions and impact as may performance-based and apples-to-apples recognize reflects essentially million inflation, was to our our last to some savings of managing a temporary perimeter, changes QX, organizational foreign our redesign $X as portion adjusted costs. SG&A on is of the be enable our adjustments of We manage costs. reflects of of compensation, impact. which currency our assessment an fluctuations, which additional reduced The a items net COVID-XX-related such

have we we operate pre-pandemic levels we return differently. strongly all However, to learned believe to won't as

highlights. slide Moving flow cash to seven,

debt. and XX-month billion generation enabled dividend at operations. fund comfortably cash us to generation $X.X meaningfully to trailing adjusted was flow funds CapEx the period, our The strong reduce For and our from cash of

As time you ago. finance nearly sheet. compared the XX% XX% can to a to second on was our of At we quarter marketable debt balance same strengthen slide end about to see the readily inventories year of for the eight, continue used our

slide to nine. Turning

have billion balance facilities approximately and million. billion We the committed $XXX credit with of had $X.X we of a the $X.X at end of quarter available cash

pay we Year-to-date to our in $XXX operations cash environmental had and paid of Moving allocation. million funds preferred available. million from this and last million believe health XX we better and Please Of million $XXX to in to XX. our of discretionary was The the We CapEx performance and we growth $XXX debt. CapEx includes and to that our $XX capital adjusted business our of business. two return $XXX which slide $XXX $XX introduced dividends. after down slide complementary flow productivity back On invested used update reflect to metrics million million stock. retained summary flow dividends amount, allocating common to million maintenance month, of million turn sustaining $XX cash shareholders, bought was safety of

incremental was tool metrics those merchandising of AROIC One as recognizes which RMI to a profit. generate

average weighted of the XX.X%, these presentation. X.X months For metrics of RMI of ROIC cost was points our the this capital over over weighted are X.X AROIC cost percentage our of was X%. Detailed trailing points average X.X%, capital XX adjusted appendix of calculations X.X%. of percentage in

Moving XX. to slide

was is emphasizes cash equity. and generation adjusted yield metrics. return The discretionary second the introduced earnings complementary to of which flow flow metric we cash a This cash and book ratio measure complements

Here of five as you past equity see years the can cost cash as yield QX trailing for XX-months flow over our the measured X%. against ending of well

XX-month CTA our to adjusting XXXX changes book the Please XX, ending flow for after just slide period June trailing a XX%. yield of and For XX we the outlook. over produced value turn cash

$XXX our In the As full higher remarks, XXXX and the our we toward expect results year. a current second his results business last modest in second Greg to million compared our year's Oils, first environment half forward headwinds Despite Edible stronger-than-expected be the face in on second stronger-than-expected results year In approximately to based continue EPS half to increasing market line we and mentioned to with last our expect based curves, continue quarter. results quarter. the milling outlook. second from will are outlook results we than weighted Agribusiness quarter, likely the be half. in Expected COVID-XX improvement in previous fourth on

some of the has the Bioenergy We and Net of of $XXX Sugar $XXX XX% foreign end impact interest tax also declined With joint year. XX% in annual range. upper half to $XXX of the outlook in range expenditures that things depreciation approximately million in the Greg from million to forecast and adjusted over back previous venture & for rate volatility the of capital of of closing the reflect turn first The expect I'll $XXX and the expense an exchange comments. million. to million amortization to the approximately effective

Greg Heckman

John. Thanks,

create results maximize for this As of quarter. requirements we're economic a mark-to-market to Accounting clear expected managing first not overtime. smooth this. out up, timing we as value reversed quarter and that example in that recorded it's that long-term we wrap can the calendar The creation the good are losses, differences business one any the quarter

seeing being highlighted During up risk discipline, We improving stress changing we reporting of on second execution earnings actions our our get taking us leadership quarter an that $X can portfolio which and that our meeting model this that optimizing ended update we even additional strong operating forecasted transparency have We our excellent drive you and we're share with see key our than approach performance. new continued finally, We've and to today. to management per to to execute month, a each business quarter. in our upside. those up progress you're greater set emphasized team our stronger financial of you to new our And areas. accountability last baseline that told of and expected. and is priorities We

better day. operating line right we'll While that and we're progress making direction, many every we're we to And moving be the open work with we're questions. done, there's than for in your the years in more have

Operator

Instructions] [Operator Our Morgan from Vincent Andrews you. Stanley. ahead. with comes Please Thank question go first

Vincent Andrews

morning, you, good Thank and everyone.

Greg Heckman

Good morning.

Vincent Andrews

very reversed just want in has is little that to half So, the understand the results better back I versus quarter half. happened the quarter the what's carry going And second now think to everything little half happened you a the first in happen second I bit in in and that, year. of what's the first the into

said the $XX. the I obviously, because phrase you guess, been want to realized So, have spot would ton of execution, strong market, $XX a you very at you it, however, versus,

so have I already you to of half in or out what the of thought that equal. correct? take Is the So, else second has what the that in all I got to looks consider happened, are were now crush market like year and to reverse margins whatever just I I going terms what think

Greg Heckman

Yes.

I assessment. think good that's a

Vincent Andrews

Brazilian just of sort is versus farmers you for is in what past lowest a records quarterly good is you selling, run operating rate those soy are And the much which conditions to guys had the the been you Okay. the doing farmer slides Brazil, farmers function and then, of that selling couple about on of the How operations crush. rate the comments in a utilization of on cost -- good which those just of the irrespective at work at have doing? allowing of

Greg Heckman

was Well, which doubt opportunities in farmer the I in the Brazilian drive being we great real No to it crush our and advantage saw maintenance, while take saw, in go the and both. think with driven unscheduled U.S., team whether a position utilization. margins were where not Brazil, to run strong the the by of it's those able did selling, improved in job only and of the ahead helped that we course some also, to there, delay opportunity but we downtime on there. But the to were margins exports capture even where of hard action they

environment. definitely the of very environment, team well executing in a this but definitely So, combination

Vincent Andrews

Okay. very pass it Thank much. you I’ll on.

Greg Heckman

you. Thank

Operator

Samuelson next from go Adam Our comes question ahead. Goldman Sachs. with Please

Adam Samuelson

Yes. Thank everyone. morning, you. Good

Greg Heckman

Adam. morning, Good

John Neppl

Good Adam. morning,

Adam Samuelson

kind margin the where they that, had have maybe network. to that and sourcing with you the of you in your around crush that leverage of the visible earlier have origination thoughts guess and positioning pretty of, softseed first mean just on maybe expectations, the state Vincent's get soy margins on to notably kind of maybe what have on crush So, that world. the are we I point second would your the continuing see and in I get some of around from margins today opportunities the and half love and I and kind year, activities been and come reflection just down exceed

Greg Heckman

in around high-single-digits you've crush Brazil; Europe Sure. in And Yeah. got both mid- in low-single-digits mid-XXs. Argentina. the then, to replacement and in China Current the margins U.S. mid-XXs; are

weeks, last of seen to in Now the start couple said, improve little a being bit. even that curve we've the

and So, QX in more to on flags the keys we then, QX. the watch but as in visibility are do as lot with seen as don't the strong the have we usual, the than broader, developing there here seen got of will the bean unusual. their as big, pace think, U.S. China the that is U.S., And exports QX, as crush, the not crop we've in a the question I And we very have into we've in exports And then we China what a on, be, Brazil, the will the well. corn selling the big crop locked kind usual, but of that's increasing -- know, purchases to crop farmer well strong continue here developing in we've

like looks it farmer big we'll have the how decides then a that. to commercialize harvest, and So,

those as So, flags are key second here develop. the the watch half we

Adam Samuelson

very And the helpful. Okay. of kind to outlook. That's revised clarify then just

So, up year-on-year. million $XXX expecting you're Agribusiness now about

So about kind where late relative that XQ you the April million in that delta it's positive. was $XXX to -- laid to out or -- in with so of

much Oils the -- You much the sugar rolling properly? expected than those increased Edible to prior -- to How up worse I outlook? be is am And clarify. outlook. and sugar pieces Just did how

John Neppl

investment were actually April. that Yeah. bit And our that, over would on the say impact that's we had the expected, you slightly. versus back in if underlying down probably year standpoint JV. Adam, little from -- I P&L then non-cash versus though number where the quarter I'd the in Edible a in $XX recording Sugar, And than reminder April, Oils, of look we've say of the range even the a taken terms million second in better a whole of we

Adam Samuelson

to Are in forward? And translation going debt. I terms execute the around helpful. services to hedging impact of the That's clarify Okay. able the mean that eliminate just you to FX hedges on level JV hedge,

John Neppl

Yes.

June, JV had at So of it $XXX target that. working $XXX they million the to hedging million. hedge $XXX been the on And million half of to the to hedged. get Their has end is

affect company while case impact the hedge to just non-recourse manage from us our would us, For then real exposure position. on that's putting broader on of a any a FX it just to debt is been individual earnings us. impact than doesn't We the for us specific earnings standpoint, a much reported a because a impact have exposure. And it level rather really which the reported basically at cash to

making look So, real we at it of they progress getting anything decision to do terms because made covered. more in a on books we our that the standpoint, from globally not but are

Adam Samuelson

All color. the you. thank right. Excellent, I appreciate

Operator

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

Tom Simonitsch

Thank good morning. you and

I you Sorry, guided if of but missed originally I last to clarify it start $X.XX the around guidance? this EPS quarter. think year directionally can lowered you'd and the the at XXXX

guidance initial that frame So, a in be or helpful? guide if you just relative $X.XX range could that your would to very

John Neppl

Yes.

we now the look in you look were probably think way all the range. biggest if million here, quarter rest close the I kind -- is in we of of forecast And to our consensus $XXX net the at somewhere was where offsets Agribusiness. So coming of kind mentioned into delta average at it it to And $X.XX that I in zero. kind net of

EPS think standpoint from million an So, if about around you $X.XX roughly. that's $XXX

And kind now. about thinking we're so of how right it that's

Tom Simonitsch

$X.XX consensus? current Sorry. above

John Neppl

-- Upside upside sorry in million is that Agribusiness $X.XX. roughly $XXX Yes. I'm

Tom Simonitsch

million Okay. And think Edible the your about you then EBIT for $XX Oils, QX. was guided had of just what double I on

comments likely help to outperformance linger? with just you us are in that the the the quarter headwinds can COVID-XX So reconcile

Greg Heckman

about talked from But so where QSR strong What of to a then, QSR over-indexed saw driver XX%. recovery. quarter, we around and -- rest U.S. little is Yes. during to saw April foodservice course we was a the of we big down big the and we're QSR, about the the a

Some doubt to levels filling, no saw but get levels. ago that year was of we pipeline

balance that and as probably XX%. of back we to open on to the the be retail CPG And over wavy coming foodservice year. that's closings balance as kind what some of how business demand where between the or of close and out Now, pretty were of probably expect and the versus it off space think through manage we COVID the the stabilized things we of net that leveled moved through

Tom Simonitsch

you. I'll it That’s pass on. Thank helpful.

Operator

here Bienvenu Bienvenu back particular. as Good with Stephens know question for go of - half Please the performance the Thanks. you've kind buying some with for balance strong in it origination China sit XQ I But you wanted Brazil's comes seen some crop the to Our Ben prices we exports. move Inc. Q the to already of and be renewed from U.S. we've sheet everyone. today, balance key as and year. year from in Greg, through that's ahead. There's seen to relates tight revisit for morning just higher going the reserves. their pretty factor as soybeans. corn their soybean issues China Ben next of is they've also the sold

just year there's business how the origination your inherent back about the balance the fares that in for through optimistic business, So the in U.S. in curious, of the recognizing year? how the volatility of half in are variability, crop and both you

Greg Heckman

definitely building We're overall. in has U.S. very that America. about South the been are happening good But definitely there. we're QX the There optimistic port what's with some QX pulled in programs margins seeing of into

-- think, I year on buying crop. a very to what's out way continues the you'll have the the commercializing, of the U.S. for of is program the the to the export how be what farmer rest big for versus weigh there

Ben Bienvenu

selling another in Okay. I of portfolio on small tomato noted a asset. process believe a guys you On you were sauce Great. large optimization, sale business.

where little optimization Kind that? of discussions I you discussions. slowdown. there But disruptor of I to had think a broader the broadly? huge of COVID a portfolio are the we been how had wasn't a and bit going update those And are think last in of all given discussions progress

John Neppl

that. Yes. Ben, I'll take

had closed And respect things go talked of in the about a year. our still you rundown to think sale. our I'll that asset previously -- with business, the we in merger Brazil pretty in confident, talked some So give regulatory before feel still mayo moving along. of We've we're about we've projects that this on we'll underway U.S. first. quick before grain And get working announced we Brazil, let's I but obviously,

talked -- late probably With get before the type review we've that QX there QX closed. to it's event

another I we it's it's think pretty in at of but it's And I confident been we it's on Imcopa our from that other and all timing with of been just we're down they're regulatory still but probably timing. -- counterparty. COVID-related, that's those bit that's we with still little moving a it's And with the project that it's have we've positive the a on But standpoint moving pretty then really And progressing. feel say on. working announcement but Again pace that side a how moving. forward. headed. little the how would slowly, comfortable where moving bit things can work pretty then we slowed do feel

Ben Bienvenu

luck Good with the half. Great.

Greg Heckman

Thank you.

John Neppl

you. Thank

Operator

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

Ken Zaslow

Good Hey. morning, everyone.

Greg Heckman

Ken. Good morning,

John Neppl

Good morning, Ken.

Ken Zaslow

you just said about you that couple the remarks. is that can opening talk talk a new You Just about and that? questions. Can of the One entail? business you earned what in that does

Greg Heckman

Yes.

oils a we've really of seen at fats legacy specialty of Loders global portfolio the and I is oils the to Bunge that magic little footprint. continues what we added think in into our there commodity then be bit and our

more Bunge but and on products problems folks and that. it's mix relationship single move power bring. ability whether in the they a product, our they to and that of eating the saw new not to our global were we and able product able we've partnership less to and went supported definitely nimble the their transactional operating from with us solve gets long-term That portfolio our model of on help and people what as been and switchover help the solve in understand to we're that be home from services is making So away problems people at platform do home to them to it where eating using

we're we customers. like it's and growth right with kind making So definitely the progress that of the right the

Ken Zaslow

U.S. as is getting Europe the changed margin is it for obviously, Okay. And about Can be question well. you talk of think crush a hog then as herd. second strong crush foreshadowing is that are then Can globe? terms And about has Is again talk outlook, are better. longevity China Chinese there? seem China they crush the why it's you And and that? margin getting why to the also the of very in the better that underpinnings margins seems -- derivation you expanding their like the of

Greg Heckman

Yes.

as the only than us quicker not U.S. come back side, has imports the predicted. the oil think any to on big of And high me And that's protein then then oil. and meal have I those been only back. course, the quick first for on not diesel. side drivers, demand than of around, big not of of big here demand have we quickly demand much numbers everyone helped let which meal tailed as demand big talked has then drivers on we've their how thought. U.S. the into a quickly couple in couple course, But where off more China, and the and numbers we meal has got chicken and around been And A China's the exporting thought of food historically meal talk one have of course countries. is has renewable the in the as of had hogs demand the have sales oil drivers good come but hogs the those in -- of recovered of

some back. So is the biodiesel we'll right that slower into bit definitely Europe XXXX to strong little and second in see a has renewable and but now we half coming which see tailwinds the going forward only laggard there XXXX demand watch Probably continue around diesel. one been of not some

Ken Zaslow

it. Great. you, really appreciate Thank I guys.

Greg Heckman

Thank you, Ken.

Operator

from with comes Heather Jones Our ahead. next Research. Please go Jones Heather question

Heather Jones

Good morning.

John Neppl

Heather. morning, Good

things lot layout It want to made more It's thank helpful a on new I I lot -- -- like say a clear. more it. release. for was and press really you First, the the

current year were question. of a the you are there's your Just May or quick you has about the from the all outlook end When sugar. full about your are sugar talking outlook When appreciated are considerably real in year is for think no details which appreciation talking real the since I QX end you assuming the you QX rate? guys for of full assuming

John Neppl

– Yes. John. When is we this Heather,

we we that week And any other. change forecast the finalized into a we that way the took forward a week maybe assume So or ago but it's that so less when one probably some going little we put bit of consideration, ago. don't or big a than in

we've XX. the for of end So the our that of is we're the reporting June it -- remember May got --

any then So reflected to from QX. the all number. be end in be August through our of September May the And in will would June change recorded course of way

But in we So a big of it's going terms an one impact don't have or other the there where that will way headed. assumption have forward. obviously in

Heather Jones

meal about And wanted All right. demand. ask to Thank you. then I

is move maintenance like and -- recently, mentioned, bottomed held basically numbers Greg well. And fairly observation? and -- their a lot that to rations. down that hog guys So it agree to agree these But meal those what our is that, taken have and would more rate has seeing, starting with rations higher seems again. soybean you does levels that understanding hog that Would inclusion you're have up chicken of --

Greg Heckman

if the numbers is not know industry of not of as as has not that, off don't I driver come fast rates, demand we -- detail. the then not then was less of ethanol generally the but was DDGs, has sure of And it's China we demand generally, kind as have driving the course I thought. running demand but yeah, the U.S. stayed Yeah, can -- there. inclusion we've seen only Yeah. that course there XXX% as in animal the But In well. I'm the the there. on And seen China,

we think a rate, from saw I protein where some that's the side. just inclusion So of

Heather Jones

glad like is the that have animals outpacing been given it China of the the demand -- because seems because -- growth adding I'm in added. mentioned you that, number And

are that, all commercials to is that, -- else might something you ones the are that the fact attribute that so there would the or large inclusion that it's we're missing? be be to And rates that adding tend I So hogs? higher, their

Greg Heckman

coming which we're back it's No. it up, is how seeing the they've as is up that That's as -- the professional what that are is it quickly commercial have. rate, they inclusion because operations come

Heather Jones

mentioned, beans as I much, far our are year, in elevation is margins. Is year-on-year both Okay. strong stronger observation, strength? showing, final with question as consistent mean, and that your very than you the And corn. U.S. my on numbers pork last strong

Greg Heckman

Yeah. We agree.

Heather Jones

All Thank much. Okay. right. so you

Greg Heckman

Thank you.

Operator

Barclays. Theurer go Ben with Please comes Our next question from ahead.

Ben Theurer

you I actually terms turnout? quickly And much weakness into pace little and business have Greg, maybe What to the June. anticipated? the bit, understand very results. foodservice? of question. wanted That just basically my now how pressure XQ Hey with think is on how good Congrats of seeing how piece. the it morning. And is in do going on mentioned that, May first John, under a much to be demand follow-up into partially thanks within question. the foodservice my to will going for this was in And strong you underlying higher versus, taking been Just was on you've then, doing. July and and April filling rates

Greg Heckman

us then XX%. things to still feels open wavy that's close our But there's And of working like I filling off. It kind out Yes. and is XX% it's feels. team and of as down down and course, about settling think what pipeline

Ben Theurer

about mean the mean or the early it you likely it's that to of too at think you margins think what's think we was Agribusiness an we going And and the I margin do the about what a quarter. month the the if be But do Argentina is the long-term. roughly been think as doing And U.S. do it, And medium crush going Brazil benefits we're as Do Okay. mid-$XX mark-to-market. if all within where ago, there? look mentioned well, see to you've clearly, into showing level next highlighted with be really and I more still in it crop And what in And get piece. to is from how outstanding you've of you medium profitability? you going? year long-term level,

Greg Heckman

margins earnings a that, you making Yeah. can XXXX business we change. based crush is was were we spoke that so curves to in The you And course Look, number on the against you can today, doing prediction of adjust the what on continue baseline. that deliver curves for the we're see. update, baseline there. $X a will to the believe for giving then We the that to market outlook is

Ben Theurer

you. Thank Okay.

Okay you perfect. on. Thank pass it I'll much. very

Greg Heckman

you. You bet. Thank

Operator

comes with Moskow Robert Suisse. Credit question from Please ahead. next Our go

Robert Moskow

here. But I'm using the to be for sugar I misunderstanding wrong And think getting your communication might according math on at doing that model base. $X.XX base. that, question. you $X.XX incorrectly But we're Or if add model spitting Maybe I said Thanks Hi. out that, I the a just here. is I'm start year. around my to $XXX number. something the much maybe the the higher my for million

So can you I sugar half at in the the Are of back start operate year? to expecting there? a loss

John Neppl

second any sugar -- the in a the our be fluctuation is think in the I to there that from half, expect We losses to don't small zero. based to flat see. second expectation on can Notwithstanding, in should continue contribution currency underlying we half what operational

upon the all it's going how exchange -- So be the the from reported to debt. rate, now dependent that impacts numbers

Robert Moskow

think back up I Well back And like I just It year, $X.XX think. you you is $X? kind half half out. expecting number look all a that of now if much like higher net Doesn't the to last to here. math $X.XX. of get that maybe EPS, adjusted I'll then the is to try Okay. closer Year-to-date your similar you're the

John Neppl

there. second year's we're Maybe, with the half. No, second there was consistent calling not Yes. last half some confusion

Robert Moskow

Is half million to right? of that the But compared $XXX Agribusiness year. second is up last

John Neppl

year. No. That's for the full

looking a the year, taking half it $XXX the overperformance we're first calling second look million. that's projecting at and full half. for the up then And the at in -- So

Robert Moskow

you the Okay. is very last question. Thank much. There

John Neppl

You bet. No Thanks. problem, Rob.

Operator

from Kallo Please Baird. with comes ahead. question next Our go Ben

Ben Kallo

what I what's Thank the the then share June. asked in maybe could this RMI So I in you. quarter. all clarity. that guys. repurchase? and uptick But the the And like the in for flow you proceeds, for me how to Maybe the the Thank think, Hey, too? you was plan year of and on yield second just just cash the use there see us looked half we changes about talk remind there? the should It of

Greg Heckman

Sure. Yes.

I'll So cash with yield. start flow

$XXX as the we standard of first up through the at that our of there COVID-related opportunity of that half all as stock we of CapEx the looking on done. that year, after a I Certainly, for time second earnings do can projects we at the were they at the million. looking just continue a it we'll modest in -- to imagine the also in and timing of was step bit get as We'll terms half some course, half have the the second the we pretty year, year, looking think, do, always given for the just underspent, always were our trading expect at looking good little to to of we In a allocation do the risk-adjusted When CapEx normal the market. it. up. and dividends look really generated expect year, So it than was while half as to felt a and impact stock And be return the picking in into with the you for like pick we the the be was we was We at half. look cash are likely in you what at And update. looked think, buyback We and we're do, in the communicated net ability more month to business ago at half, I half we're of second year. pipeline projects. first where first the at number will first opportunity is the

advantage that. our of announced our small Q, of in continue That you'll on plan in we to will to the all we're a we'll have assess but pension contribution flow opportunities. impact -- some take making second a to also see tax million $XX half, cash We

quarter terms in get second in RMI, the well our of our of hold strong related ability terms Certainly, growth seasonal. to ahead are In farmers we our of origination it's to in selling pace very crop. normal and a of the America, South

So big we we'll North of a then, we're there. about because of have in American harvest. good feel And very growth QX RMI, in how positioned course,

way, again, sure we're that invest But, we on in a see when we're managing to a getting that expect that. RMI So, return we'll in making smart that.

Ben Kallo

there I ran away square is is numbers But I'm me for before EPS to like math back trying everyone's that QX. was commentary second go of second the a seems coming a do big big that like there. looks granularity, half why half earnings, maybe here just either. should not that? maybe to a to my thread the in And yes, I think, a And that it to I'll in kind when the And, we was know to, you QX. drop-off? total. doesn't but outperformance in I what just with flesh expect your good $X.XX it it through But to we're the that, questions big want expect leave don't why know we getting drop-off here mark-to-market

Greg Heckman

look at the Yes. curves giving us I'd what to the continue are in we second say, current half.

through right? facing saw a working model. Now war. trade that QX. We're seen that's new different that COVID, are as Bunge, a something we team facing and can different year last change we're with operating we're in we quickly, before, we We've -- a definitely it And but the still haven't got

protects on but that marketer, financially that. Sure, we'll we'll we've second is, their situation the If helps work to the of get very the got tighten, look as the all the half, reluctant of to there the improves than the markets coming we've other continuing QX continues our to COVID see in they how industry pulled opportunity that like deal us based Argentina of continues And he complex, aggressive for really complex. we as the oil continues feel, got in share months. and well a we of more how was Brazil we the which cropped also big be against business that and across And a himself continuing very challenging of some it the China side little trade then as couple So struggle. with been the curve. obligations. then the is fulfilling to farmer as feels into a see, forward just here from farmer U.S. They've as crops there, some be operating of the last

lot in of the are seeing of that they're a from with because net-net, COVID. customers their So, uncertainty spot people

happen. the So and there remain and are giving take out spot there. they I of opportunities visibility. the are very we've numbers got today. be we business expect and as also lot the remain of think less But us nimble, we're oil well-positioned customers to buyers we And advantage we meal a right comfortable That's to that the team

Ben Kallo

All all. Thanks right.

Greg Heckman

Yes. Thank you.

Operator

Our next Bank question Ken is a of follow-up ahead. go Please with from Zaslow Montreal.

Ken Zaslow

cost a key of is and to say follow-up. a metrics? about that the the what Can improvement lower little Hey, bit us are now tell you year they you about the structure. had what utilizations, record efficiencies? you the the appreciate Can operational these You driver parameters or ago, were talk said two where

Greg Heckman

the step Ken. We the driver, buying it's the has team to think We've and full. teams run, also commercial sure industrial that but running. those key so facilities that's that's well up selling and the our earnings a to capacity meal whether that's on get staying And the that and origination products sure we've working risk. making said I as, done locked customer as side those having the assets first getting ready there, up that about stay utilization coming those run making that keep we make been unscheduled step before operating one oil, the the them in where downtime. inputs it's then customer and together the and the in of business facilities on course, is are talked managed sure Well, and customer And we we're and the from the run. at is away to beans plants the I that as how the model the able and And getting

about And problems meant as we're their get as thoughtful being so So our is, been make us much And as utilization we for been then help are thing other global we the it and we're business at business solve some downtimes where running faster company to when customers the as business, well. margins able move a the scheduling best. business a to great extra and We're of move around. frankly, we're capacity again we've about global able we're taking to talked scheduled the now coordination. it's looking sure and that's

John Neppl

-- bit And visible, I think not team well. focused the are most incurred would the likely is just always focusing add well. we've there's think in really from COVID, progress the in of second going making number, that cost that And making time, buried we -- to It's Ken side. on headed We're it's margin on as is progress the well. the good It's a where think cost feel excess standpoint although quarter a little as -- here good I there. as good relative on team I costs but but I we about SG&A because take industrial to that we're

Ken Zaslow

kind a anything you're that margin put that Is the way fair crush that. giving given is, There but the and So the backs towards like is that or seems direction. of control that the $X been moving it continues us? hasn't fair your towards business like path like to it the you're It that saying milestones any these move of risk to way. little that's say working the again that where management operations everything still way is in between absent number

Greg Heckman

Absolutely.

transformation. the We COVID. all areas our on others that midst schedule of of to the We're the and pleased with ahead continue in be in and schedule in really several own

but customers more to for to continue really So pleased a challenging the stay on execute focused in ability be also the team with transformation. couldn't environment, the

we've got we out doing it. to we're the the finish year, our we're on cost at there's rewiring, We of finish There's to here get come team to good We where look know we do. rationalization still real as end right things. but more got what feel and more and the self-help Now as about portfolio we the doing track. more

Ken Zaslow

very you much. Thank Great.

Greg Heckman

Thank you, Ken.

Operator

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

Ruth Ann Wisener

have questions, any today. to out to reach free feel us us. joining And you if please for Thanks

Operator

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

may now disconnect. You

Bunge Limited (BG) 29 Jul 202020 Q2 Earnings call transcript