- Earnings call transcript Q3 2022

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Operator

Hello, and welcome to the Bunge Q3 2022 Earnings Results Review. All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. And now, I would like to turn the call over to your host today, Ruth Ann Wisener. Ms. ahead. go please Wisener,

Ruth Ann Wisener

and third for quarter Keith, morning us for our earnings thank you, joining you this Thank call.

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

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

Greg Heckman

the quarterly against team. thanking you, outstanding Thank results want I of focus delivered Ruth Ann, environment. and Through their the strong coordination, everyone. start by shifting good to morning, and operating we backdrop

and expertise, by we've of impacts, all the on demonstrates and as and ends quickly energy platform. customers our both relationships inflation, this and power our analysis the the factors, conflict demand driven adapt value quarter, global the Whether or, team deliver to our quarter footprint, weather uses are for markets of those in costs, to chain. Through once team created the again approach organizational disruptions. of The strength the to supply our of third ability global our asset

beyond the two risks. continue continues we disciplined meeting with earlier to in focus we to growing demand benefits current Looking partnerships renewable and be to and for this expected feedstocks the is Take the making on demand by this balancing business We're increase. part announced fuels, market year. strong environment, choices low-carbon

is feedstocks joint investment we're ability oilseed well, venture and renewable crop Our develop with to in renewable Chevron bring low about new a going and our a excited to cover to its CI market. CoverCress

renewable Just of the venture expand feedstocks in create Food in two for weeks in edible of Bunge's region. key the cycle the space. security of ABP with markets to ago, environmental renewables commitment This full in innovative, joint Group, life that partnership oils. encompasses address a Europe that business we division portfolio will announced Olleco, a sustainable help are a great challenges partnerships renewable energy finding These solutions example and to and our

an solutions global significant the processing, a South oilseeds we're the and offering services, Brazil. providing we as farmers integrated At our in see in this launch consulting and obligation leader America time, same and in partnership with long-term inputs, As opportunity. expanding to capabilities complete agronomic of with Origeo, the of UPL financing origination our a

the the supply but center not and of inflation in of or chain. on higher more place driven Oils. impact mention John same above numbers. P&L, impacted I Like Bunge. quarter Specialty magnitude results but go businesses, and detail the performances want was energy ahead third core to the Refined inflation segment by as the purely recession our and last companies or our manner of EBIT on to Agribusiness are we year's industrial all due by Adjusted and to in expectations will Turning into costs in strong

competitive discipline. dividends strong usual remain least in balance $XX.XX dynamic to liquidity with and call We're future John quarter. third a at a third that, year our advantage. this deliver to the as cash our in I'll a sheet, ahead, execution the of operate row. did far be results. flexibility current through return EPS repurchases hand expect environment, record which solid our over for market, so market Looking in the and full having with to to global now our the the In adjusted we are share year in walk shareholders forward the in expect position business, Based optionality the form are a to the invest here we we upon great our to With and and XXXX, of moving and would

John Neppl

Greg, good everyone. morning, and Thanks,

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

compared quarter quarter third was $X.XX third reported in of to earnings per the share $X.XX XXXX. Our

the EBIT flat reported were primarily offset impact $XXX results costs share of a were as onetime and rise Europe versus increases of results South per items. compared and Adjusted compared of Lower before on lockdowns. results results related by primarily driven Merchandising Sugar $XXX Bioenergy North combination the our offset $XXX Specialty year. China sharp difference of in of in corporate include and related primarily lower and in year were negative non-core ethanol $XXX Net volumes increased a to million Adjusted of were foreign In were compensation & performance-based a decrease the Ventures. or in gains by rates in decrease our where The lower contributions to with by up million high. last of slightly primarily North timing the down was South marketing. to oils and offset energy million was interest and increased countries results reflect in the year results total, America negative down million more Oils due Processing, higher America Our mil timing the higher lower by in expenses EPS interest last imports operations grains pressured by rates margins. to were last higher $XXX of $X.XX results America. results last were Refined The mark-to-market Specialty In earnings oil the financial in certain North $X.XX in South in Europe were Milling, In higher America, quarter to Other in to combination levels. net interest were offset was lower segment. our The per results lower essentially in venture versus as partially Bunge in share and expense Also million borrowings $X.XX pandemic-related interest compared average were joint global America. year strong investments year. to to related the quarter in was results in Agribusiness due a Results third prior $X.XX segment and services from than impact impacting in driven In costs. last higher year. taxes accruals. by core results debt quarter and Oils, global performances currency Refined were in refined was lower

reported higher currency were However, incrementally the gross are borrowing with costs in fully hedges margin. offset that

our years adjusted markets ability and also trend timing see you differences Slide and over global past along trailing successfully Let's of team's performance platform. four the our manage with trends demonstrates strength This EBIT where EPS X, months. notable and the XX for rapidly our positive changing to can items turn the to through

addressable million $X.X of of allocation Slide as includes year-over-year, capabilities million billion preferred generated X increased sustaining now $XXX available. SG&A to paid billion resumption discretionary shares on to As and business invested to we dividends equity, third travel $XXX million had also X, and expenses debt. to growth. shares maintenance, CapEx and shown the and dividends, that repurchased has common common retained we Slide This which on approximately such net $XXX operations us we modestly approximately reducing our health activities common productivity of allocating $X of the increasing Of invested drive billion working as million in normal with growth our $XXX while capital flow as in and year-to-date approximately investment year After this converted flow, cash environmental, details additional left safety, in reflecting during employee of and more our related well funds which cash strengthen from CapEx, adjusted $X we million capital $X.X of amount, year-to-date. quarter. during

allocation. We will capital continue to disciplined to balanced and approach maintain a

Slide billion. quarter Moving our exceeded end, inventories, X. to marketable RMI, $X.X or readily approximately At debt by net

end, debt commodity Investors As has and was our and to in position, out website of free remains our factors in and have you environment. additional have $X.X posted morning. impact approximately capital which have Slide At a section liquidity cash understanding strong. provide presentation we volatile ongoing operations, from been this the reach our unused This questions, price our any cash this that XX ample feel team. committed To inventory prices our reduction. been commodity Should quarter needs movements moderated highlights invested of in flow credit commodity has toward how us deployed to other facilities our on manage recently, released liquidity provides to the price billion available. IR

XX.X%, profit. operations of how X.X%. points capital on as percentage The RMI metrics XX of points XX, adjusted in average tool shown capital spread RMI ROIC between our weighted generate of or was we over ROIC incremental XX.X% Slide adjusted months XX.X these our weighted of As X%. over trailing cost X.X reflects our average cost our two to a percentage was use

Slide to Moving XX.

$X.X months, XX XX of flow XX.X%. cash discretionary flow to XXXX we Please approximately trailing billion cash turn outlook. produced of Slide yield a and our the For and

previous to are previous line results outlook to from year, full than be significantly in In expected up outlook in results lower the our per $X.XX outlook least expected results particularly performance processing our year our outlook. outlook curves, at and offset full year be Other, Sugar In Refined full operations. venture our last our year previous from mentioned are results are last XXXX from last than results Agribusiness, results and by last down expected to account as our and share previous and Corporate to higher refining Specialty than to EPS our in expected lower adjusted with are non-core, by Merchandising, Oils, increased In As his higher which slightly strong into margin taking and results, third stronger year In with forward previous we've a more but expected outlook and prior Milling, joint than year. & our a had significantly higher environment share, Greg line per our and are to forecast Bioenergy in in last year. year $XX.XX remarks, over quarter be year. be year than driven our down In full be increase previous year. are expected in current full

Company amortization the estimates million. XX%, rate $XXX Additionally, XXXX: of expenditures $XXX of $XXX effective tax adjusted of for net following annual depreciation now capital expense the million interest of an million, and and

reduced have over expect some of forecast XXXX. Greg our chain I'll previous million estimate With $XXX to closing over CapEx back turn primarily things comments. our would due shortfall carry that, the We from to delays. into We for supply to

Greg Heckman

Thanks, John.

to how Q&A, our thoughts we're most turning that to infrastructure, the investing a in importantly, growth want the we're on closing I and, Before physical to technology of that's ensure in capture team. offer us, few and our best to ahead positioned our business

operates in projects and platform at as upgrades existing to First, our utilization. well our in safety investing remains in ensure facilities as strategically optimal and and strong maintenance key efficient we're

fully is this in as of our assets to tools. already that our capabilities greatest further area aggressively deliver right systems investing also goals management greenfield both digital to better for automation learning brownfield help the to machine return This investing insights technology we consumers We improvement technology, know run exceed and team. flows connect right and working in teams best an impact our to interconnectivity, anticipate great in ways opportunities to transactions. investments and in Second, investing with people our empowered are our feel investing strategic into key manage also possess new in use smarter, us market leads for the our of And and our customers. industry-leading new we're will to We're we includes performance. plants increase in to We're real-time and simpler as ensure a optimal Having and our Bunge continuous make trends, focus and our our most partnerships we planning when farmers on through reliably faster and well of data use where example to And requirements. and ways. projects, is skills the risk what success. importantly, we're at and

to organization. and intern generation all and steady Q&A. that, levels we support the next and continue strong the We're develop with expanding learning best and We at to of that talent to talent trainee this of in programs And for pipeline diverse investing we'll development also programs the a of our great leaders our have into to ensure company. turn brightest

Operator

[Operator Instructions] first And Barclays. with comes Ben from the question Theurer

Ben Theurer

So it's a structure question.

$XX that, few you've how per you raised how like itself less to we now, is So record increase forward? think is Bunge just that structural, and running is been driving understand set how talk I in this to $XX.XX results. guidance is obviously like ago, just this our all how what last I versus a about much a in made year? mean obviously, year third I Bunge? that. at about to just much earnings $X.XX is mean mean But know of market structural, bit you've So of year good. the in environment really of is you about much going what and And share little could the magnitude, light the you years by leveraged a control you how do on much row. you Also

Greg Heckman

Okay. Thanks, Ben.

and first little Bunge about running company. we're a bit different talk the me Look, about talk Let then very a environment.

to to mean that only the that's the the right, it's and on saw to And at of changes the not focus We we fixed commercial and focus very our big of a to just investments that's we important global get completely look the to support investments way the that, a teams agility shown it, and third need lower, risk the our footprint, our downtime are starting businesses, here. sheet, different and optimized how reward system credit to the act. around be led approaching industrial asset or And footprint. with we how and with make If significant the with we've the operating investments. very have we've discipline, number of operationally and very alignment of advantage how excellent the made, quarter on you ratings of management and about operate, in the that's protected the can a about really then strengthening of made the operational that important, operating you you be level focus, fantastic the the global day-to-day I think We you agility we liquidity. how we We're in these think work the really capacity And -- here think better us team volumes, and our that that operate portfolio, we really continues the and that the model assets. of the teams. improvements even on environment. fact allows utilization, quarter. balance unplanned take model, some to here speed fourth And our the our course, and I the

we've started chain we've down right? externally, energy prices doesn't with with look here to been and even And climate the control challenges change. we and get we winds got and the If in be the tight, right? going even the biofuels and remained the that's a the got so trust renewable going think a the to that's then supply to of going on lot of dislocation cured of of of the three in in we that's course, that forward, here I expect that dislocation pandemic today diesel, look well And in because of, last tailwind but from things volatility lot Global a are most we've on the weren't, in the in then back able led weather Again, ended of volatility. And and as world. that's you as geopolitical general changed, done that -- definitely because and S&Ds going look forward globally. is were tension there seem parts more have a that to the like the uncertainty. you years -- if If to what the war in and But lot pandemic Ukraine-Russia then, all extremes the carry conflict, just not add you've had of damaged. lack infrastructure that's

supply we our So, operating all. manage what problems. different in really deliver, is both that. really and it's and is, of the of helping that ends business customers our complexity think I number our of can leads conditions continue to helping and footprint showing proud for more them are it complexity that that And chain at global way of to we're a And solve our

Ben Theurer

that just us Well, we and you follow-up. basically last and more versus I comparison Perfect. one look is Agribusiness, into year, when -- just fourth in mean what point quick the for and in you Milling? you've the quarter the a expect then And little give for very was could fourth detail segment-specific clear. and bit what to guiding what from guidance Refined view annual of a a sector-specific quarter been of

Greg Heckman

environment QX have the do so course, part predict. what us at look are. just very in the has start that the out even that's of seeing least And And the of we and P&L., gives I'd into course, already. hard of an starting a here in what $XX.XX. then What at, is some then, of most the we in And no booked that confidence stable Refined by one, to for Specialty XXXX. percentage doubt the Oils been we're curves seeing saying our outlook on you Yes. reminding are look the at we is what and books we we higher

you think, if off, globally So it's at risk the fairly look I macros.

definitely out. levels with in curves. we're so, it's and of the play uncertain And in what's outlook, our it But will I very operating that risk, lower that's think how

John Neppl

just inherently had I difficult to Yes. year quarter would the a in most last predict. add, the the one and that's ultimately, Merchandising, Ben, we -- very good that fourth that's

And so, when a also that's quarter ends we where don't we volatility. we see year, the certainly last saw what opportunity up forecast like but

So if segment. that But be $XX.XX be will least upside. most implies the at certainly, with it in Merchandising there likely we it, get could the

Operator

Bienvenu comes from Thank you. And your Ben next from Stephens. question

Ben Bienvenu

a follow-on a I maybe but want ask Ben's different to way. to slightly in question

priced drivers year about on have to a of bought of there's it in to like outlook exceptionally you the looks forward relative we where I'm your the today. is the next talked undervalued demand in And below gave couple backdrop last for know to quarter. as power, us us that stock I the constructive back price what Just even either today, about, next earnings or or period over to some the the would either in power at thinking draconian seems mid-cycle maybe visible fairly stock update back baseline being earnings you very kind see quarter. happen the it the in wondering or XX-month Because years? of implied that the a guys you soft baseline go outlook given

to do where get? to it I'm probably need you they needs are? just bad risk? of it's to Does think to be happen go how tail undervalued. agree I for like things off a But things need curious What

Greg Heckman

don't very an Ben, see which here Yes, we next looking businesses. for undervalued, couple Look, out. out environment thanks so far in these that of for it's years the we is agree fairly calling

be biofuels tight. to the I about at production what see we continue And so look stay diesel coming and what to specifically. on globally If demand, the continue from on a from structural to to you talked tailwinds renewable needs generally standpoint think we done S&Ds to build the crops setup

here So, next the baseline we not see of a just don't that's way for cards. -- years. couple back to the That's in

John Neppl

tight up market And with people demand that oil would that where perhaps in would think as Ben, front-end for agree a soybean I comment discussion. isn't look ramping very and for even I that, just when and the today from quickly and very oil, looming tough is lot for us, recession still R&D and as even I of company you we there's environments. would demand a some we're the Greg. well yes, soybean -- cash has generate forward over you time, oil But -- expected, go always at back look have have I refined top in historically if performed And of our I strong. think extremely on

couple baseline point, we feel even we where $X.XX good And comes next scenario a think see play. years. very the the really into So, I Greg's to don't about of

Greg Heckman

other to build the of surge is see. How to think is or I personally capacity, with and with globally. demand industry extends And that a with, problem every as it's tensions. kind of supply that, And thing based geopolitical long, the past. origin war ourselves, no what's longer build we takes our done about, we've for And available also on that's had solve It's a was longer a what Every that things I and talked we'll things, we're globalization specific more the to destination to think are that the And in true happened it that means and period when problem struggling time. think get done. cycle. I to and don't broad-based. think expensive then I

problems, ways to and with So to all well. means which are more that not that we to fewer and opportunity with -- also help help the as there creates the people And is food that solve solve security, have sustains volatility. changing, of as cycle

Ben Bienvenu

That's Okay. great.

talked you that. a in your expectations But help you of about was part quarter. that? as us that allocation capital back follow-up, a it's multiyear What the about I stock Is know priorities. -- What plan for catalyst something as think the did something Just around prompted that? your in buy maybe that

John Neppl

part normal pipeline amount we really buy. limited forward -- normal going felt said quarter over any time we amount forward. we'll just good you to have going look years. of of and and Yes, looked generate a opportunistic like of of and just forward we're to right Ben, to quarter, a we're of as the of time we do. it blacked allocation a to sometimes done. plan. that, our in ends do look this stock It's that it go-forward in worth given around planning windows kind and of it next be we some. like both talked our going generating continuing we're be We've was the a of CapEx at and won't about as projects, -- kind we're one be and we buy out the have M&A, continue just and it's know, like back so And And we step it time, pricing. cash cash, have at it quarter things always And felt but we our time it where every timing in was we'll around like And to part and to billion do -- to we've we five we to And $X.XX

Operator

And you. comes question the from Sachs. Thank Samuelson Goldman with Adam next

Adam Samuelson

a on pieces date. about because question, the to of maybe wanted year fourth some Agribusiness to quarter just maybe first outlook So Agribusiness in just think full bit and the I the thinking down little

see from fourth North margins whole and that quarter, the had assumption? be merchandising would I in year's processing of side? something as infer the higher think -- starting and gives basically that -- in do But am now flat you the mean about processing you had You're you I America you year-over-year a right of excellent buildup? Merchandising thinking especially kind just kind what always is assume -- missing talked on in as we segment. I don't that remain good and a Or don't the assumption lower crushing levels I last market Obviously, baseline.

Greg Heckman

there. backdrop and that's I freight some is you policy on that also but zero correct. not demand And in China definitely price had with Merchandising, course, No, the about effect when down on COVID continued commodity opportunities only there, of think think

that out. the very how yes, So, we'll see And North then side, America on plays strong. crush continues

from the job Europe definitely managing said, Of nice some whether and there think now. But the course, I of we've had had of we the those a to energy some which watch in our we've when capacity the soy would been drivers if be big got our in to very challenges run. on to so that from here. it continent effect of has margins are other outside done in have -- That ship some the lock volatile being can margins there as has team or

John Neppl

unusually a pretty Yes. course, where for again, energy ahead But some phenomenal with couldn't some year of based current of remainder in we going that it's half Merchandising, add We're point, year. And then, the have look that's forward end just in upside exceptional. Merchandising. going Milling had, year. Adam, year, year to high we'll I we been of the when processing, just on COVID in which good tough is at processing we We a be we a environment Oils predict mean well for finish we the Europe, we'll last versus is side, doesn't the is. to first And ago. -- had on Refined don't this It year you strong it that, significant going at kind impact with look certainly when forecast, at we're the in where last China, up overachievement of relatively costs our year. that Specialty the and to then a and fact the here you last really are year strong a just year. repeat going had that to finish And in up the up I'd but of year

inherently it strong very of than most Merchandising, year-over-year. part So be all to maybe which predict difficult rest in of looking business, is opportunistic, the to and the all, the is most is the base that piece other the

Adam Samuelson

That's And came allocation back the debt down. the maybe Right. some balances obviously discussion helpful. to of capital down, mean working coming came I net then the capital and

your of are are you powder which frame M&A. stock. some Thinking funding facilities for back dry But credit you of committed is? term a buy can think couple of did those that you also just opportunistic facilities help potential draw terms in have, loans, think us you You what the today delayed

how Just the you do looks balance have underlevered. broadly M&A powder that that and you see the pretty environment that dry test sheet in

John Neppl

mean at not imply alone, our if metrics just Moody's, debt $X it example, X.Xx a if today, continue at in what with you $X we've you we're to for would powder we capacity -- agencies, look generate look and got expect billion to for are where I that the rating -- to to dry today cash. Yes. billion mention credit of

the of -- be the do to or That's do timing want dry CapEx. certainly, levels expect next a slower but be we mix the capital And and we those, given to of to than we're opportunistic, part historical have our going our don't that have powder. as the these with before, of we above going that Certainly, couple things and then, little to lot area. CapEx, we of maintain very timing -- as maintain we'd what like we we're projects forever. do. We levels in certainly to of to buybacks, constraints, big see M&A just to on another. to we said want that. expect what going approach But supply -- capital timing deploy way of chain we're And to the significantly of discipline well. conservative in And is difficult So, obviously, is a to are of not one we years predict. and M&A a an course, eye that's

Adam Samuelson

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

Operator

Credit Rob And next with from Moskow question Suisse. the comes you. Thank

Rob Moskow

questions in And guess, And is for receivables, cash you give rules. the statement. trade credit volume a -- yourself Two given secondly, Europe the cash you on give could down? flow securitized where did accounting processing and very I I are volumes the I Maybe conditions. regionally little is But had a it's just color where -- question your imagine flow it's you that negative the when using operations about actually. I more your you from up down. are know you positive. volume the are quarter to because tough wanted impressive

more walk repurchase, is it little you is to buying me in want? as it respect obstacle about So an to through works? back how not relevant much you really share with And as that that? your a Or can bit shares

John Neppl

from Thanks, slightly we were all, and one Yes, up. when look and then the down, the at were else, places a down in of Yes. to two operationally, But quarter; quarter Argentina, year-over-year we we for China. from first everywhere we Rob. processing standpoint, the flat a actually, were was refining

in impacts It the In impact flow. morning AR cash we ahead our this volume It we processing. in our of the confusion terms So try actually, out around despite and in to volume our year-over-year cash doesn't part Brazil, flow. last respect how some on year. program of deck flow. impacts With were difficulty, cash to portal a U.S. website eliminate on cash strong is basically presentation to the of securitization on around And the impact And... flow, why really processing. help put that of of Europe, in very flat we were the

Rob Moskow

see now. I see I shows activities, It investing right. up That's the it in it now. yes.

John Neppl

fact, have will to will change our hopeful -- cash externally, aside clarifying now in get long that and just and right on eliminate to which make in go kind that, flow. report can underlying cash of real way capital to you program going underlying we're a do a that working have to the Then flow. it's in that way And of look at redesign really our to our we if working it we set

we've we debt way of capital inventory period. opportunistic. And our been inventory at of our but will ultimately, have that when yet capital continue investor levels able it's versus been to or those at to prices, at reduce over how our back get maintain look our we to able up but debt that to And obviously, And and the in numbers. levels the it RMI, still our because yet time look we've going a our be share capital or And ratios on to been That's debt, opportunistic is to to deploy of so a time, working us. big our available much. is repurchase -- our over underlying where working be flow, have trend look down decrease do, we increase there's presentation leverage to FFO, in part cash share there's it. then ultimately, reconciliation an adjusted other for elsewhere, repurchases, do gone So why but the

sense haven't times think do step or we it of at week when we We're and in makes shares. look don't systematically -- amount to We it. really month view as every it X to just going every by

as a flow before, strong would given be We I going to of said that it, committed forward, -- are cash expectations expect we've will to the and our mix. that history especially part and

Rob Moskow

XXX for Can the given came sheet? the not why I not flex million? balance million, ask number not XXX Why million on how the to why XXX you

John Neppl

Yes. fair question. a that's Look,

we we've it and I don't just fell science could than as there's just do like minimum, be it we part at going other number think a we on there where looked where just good bigger quarter. real reason time picked. it that to the you've just no heavy where chunk a to the if -- just of mentioned. for may was we going at a particular we it committed was what I one But -- know we like were other forward felt but year swoop, have number we it's a that times behind XXX -- million any be than not

Greg Heckman

volume, team as just right, about part quick. might it is mean a system. of to think global I the we on brag I the real continue

that to in KPIs has -- important ready assets phenomenal the done investments So a fixed team one, the health the is of job and industrial up having And cash supply long the those that great of have even they've and in. margins chain, are the as teams side, working globally job there that margins in on when been a China downtime. been locking the heavy things The the having on better then done these run. tough like are and assets as unplanned asset team investments, managing in have

it's Europe to lock between be so great team that footprint in North volatile to team in As been ready. done America the and South of been tough has and industrial assets prices able those being America a with agile order the margins managing run our had energy job Europe margins very in those and so and as and volatile,

is So, the of see that. of proud agility we those team are coordination and you very how the the volumes there, and

Operator

you. Palmer Thank question the from next with JPMorgan. And Tom comes

Tom Palmer

on and River off. both affect shipping I your on get delays the thoughts guess your to to opportunities just kick I headwinds? Mississippi business, it wanted how

Greg Heckman

adding definitely to an it's situation. already more Yes, complex complexity

it's course, that a having Of not part us, unique of and to system. is global

mean the strong America. shifted it's North with things to here course, in North now It and of China always things is farmer never river more with even able South the with Black soybeans that is really to P&W. logistical has were one to in liquidating then America. those I tight Of American things which us, when problems when to happening the through in things to in the the that also this what's shifted footprint, dollar Sea America, it's been that was were the exports important And we the important. get South our saw Argentina but earlier soy

in then already global about it is America. margins good are the flexing North that system. And So,

running as where be we're to bids farmers. there So to product have hard move export, able as continue and out of can the course, the to process can't to to we for

Tom Palmer

ask wanted demand oil Great. to on soybean I And the then side.

that There biofuels it or demand? using past plant see visibility yesterday are you you've terms of quarters out nearing that oil starting kind the like large from soybean food seeing of feedstock. couple a ramping started pull? Are plants you production to Or the offset quarters? are state side. here signs some you RD sounds in industry? a increased seeing diesel either completion It variety heard got soybean we steady least on from your any to demand the oil has over So of of at a of book. operator of their couple renewable demand increased of as are terms Is in pull What industry the destruction biofuels from

John Neppl

dramatic even percentage bit inch a up start. to seen oil. total refined more hasn't there's what's shift haven't yet. the Yes, we're we -- for food further really a curve of side. take little that, is the selling, on more I to can demand as that out Energy continues And on Yes, Tom, but decline been the but it any a interesting soybean

and And And we're the per demand in price probably energy but there's typically when, about and say, quarter interest at grow more food or what oil than this or the does there. going the willing one look from we've look being industry beyond of lack beyond, two usually, it out very seen. any you haven't continue where a And point. out quarter, a lock is the pricing we're lot when interest either been to next obviously, seen there's and steadily. the we at decline we so deliberate out or in to not amount or And X of lot quarter two, crush soybean out forward locked

we're where at trend the about optimistic pretty we're So here.

Operator

of you. from with Thank And Bank America. Byrne the next question comes Steve

Salvador Tiano

Tiano Salvador for is Steve. filling This in

up changing renewable question structure kind bit the is Inflation following from on little of first credit fuels. the my So is a reduction XXXX.

renewable to do years? option? a do moving for oils will even think next more amount like credit or the vegetable you for different change that this fuels, flat CI-based How changing demand see to incentivized few think demand as soybean the the for an I opposed ethanol this you in landscape as

Greg Heckman

Yes.

reduction All of out yet. the inflation hasn't played

we're Nov, then is other friendly watching mid we're thing oil the of EPA. I think, out word think the see going Canada. it And final in some I feels canola But biofuels to of to from net-net, general.

details overall we'll that But right into see expect continues and demand food canola's that and play a but up strong Of out positive the the side, friendly renewable course, there's big to pathway the continue. if to which down into be from seeing feels all also U.S. now demand. but work a would how getting net-net diesel,

John Neppl

add cooking obviously Yes. And we're And these on limited And oil positioned that. the oil. everything be base of because animal off And certainty we soybean are like going a for would facilities oil to a us be think the to a about for and -- scale. consistency is they and is that supply that. this we volume be of large primarily well price a Canada have There demand score, oil as if used supply the that just handle that's massive to canola And provide big big of CI large renewable soybean canola a would important. amount you be feedstocks, fats, of canola probably will diesel oil renewable lower good that. ultimately, able ramps to And CI to up, but a processor advantage the pathway ultimately, going very diesel all supply tallow, take industry. of things I in Greg's production of lot big ultimately, to a to point, finds one is

Salvador Tiano

the still soybean Perfect. normalized Okay. what it base on oil. by base, I I has than more also per curve And going I think, a touch wanted of down years double But it's price to the the mean I it to pound cents was, XXXX. guess, ago. XXs,

actually discussed the out years the couple around seems You Or think prices for There oil levels current of curve $X.XX? can emerging you Do be than usual. out higher to at pricing of more a how demand further is more stay there's oil soybean demand. that correctly?

Greg Heckman

not we're think right, going smarter say market. the Well, is outlook, as we the I than The market. do market at our look we're to

markets XX- the more not probably Now you as at are but more markets there's a the certainty, but in the predictor doing. less times, market future, to and is as the always in become reflects what better market. cash XXX-day economics at market are clear. only to market the And need look the you need ag do liquid at to the look And general that

John Neppl

just liquidity. far would no add really there's that I And Yes. out,

indicator real a not up. probably things of end ultimately will where it's So

into at you as been look inverted extremely the have you As things rolled cash, forward. crush. robust the the has curves it's been But get generally on when

at demand far to So see market -- the impossible time. to we that it's S&Ds are But obviously, expect adjust to point, pretty to further predict hard out. to we're and to strong see I And will the whatever think imagine the out. going Greg's

Operator

Thank Morgan Stanley. you. And the next question comes from with Haynes Steven

Steven Haynes

and I kind thoughts just any kind dynamics? footprint was just that broader Brazil-China your if could and impact corn how of hear we trade your the thoughts of agreement wondering would on on

Greg Heckman

Argentina. think Look, grow able grow long corn footprint complete our available, will believe I it American and have term. And we We to origin in in to makes being Brazil those of another in and add to crop I grow volumes love Brazil Sure. for corn South the China Brazil. -- continues sense think really we

be we'll best every because so, And available works. and origin we that's global and prepared And want of for system, a when every the consuming both to them what's the serve part market from destination there as the to customers. be farmers

positive So that the long we will over a be and term, it think sense. makes

Operator

Thank Sam Wolfe Research. you. with comes the next Margolin And from question

Sam Margolin

now really theme subsidized processing and of catch kind value has years if two unusual a higher center RD And a and to now this to margin? wanted oil. market environment I carrying is a know the and the and the oil and lot of on sustainable on of the if commodity? is and normal Or is processing, soybeans because even to meal almost going more I an want sort that's mill the new think crush bridge or if demand for you energy up such is of What sort where with by big about ask

John Neppl

range Oil I it probably and been XX% bigger John. will a crush, has is become time, hovered, in crush that. continue crush. certainly contribution think part be very not And bigger strong robust. part been a means, This expectation and well. of Yes. a meal as little to to the incredibly production. time, has and here move oil thanks. terms that's diesel around the especially been historically, you're whereas the in of that because over seeing around be oil in It's that even forward increases Sam, mix And bit certainly could has going say, margins Yes, and the much overall U.S. as why perhaps And our over And demand than less by was a overall will strong demand that have the demand renewable both crush there. meal demand is been meal any of today laggard

we as see But the here it in the the high I for low it's in Hard think it down XX% certainly a for sometimes on it predict demand driver while. meal get been depend will XXs. over and will on today, future, to XX% could but contribution above go that. be XX% as And oil maybe.

Sam Margolin

more year, the in Okay. had for quarter come China experiencing Merchandising. it's a was really incidentally, up you of 'XX. very And wondering call times with I that of the of throughout detail kind since and a little half China if a was And second a specifically couple about then strong could and last ask Merchandising rapid reopening mentioned fourth I

so, if maybe China year. I China if your if a caution Merchandising we really And year demand next so, sort for reopening little accounts of faster entirety if of a of view recovery. year-over-year what wondering for maybe and on was and of into the Merchandising that mean does get more the end this And pace

Greg Heckman

Yes.

two big probably one China definitely there's think them. I is of drivers.

important global of course, part the demand they're an picture. Of

a when effect. it trickle-down down been, definitely they has are -- as they has so slowed And it have

And constructive. be you yes, demand yes, we'll to the So get got beyond see COVID there rebound. that policy believe eventually and should

from what Ukraine, much corridor overall, more driven that it also is amount supply coming will and other in and a merchandising. in markets tougher to think, has buyers and does spot that remain be for environment, from, a the where mean uncertainty the just demand. even is they're of sellers like The uncertainty And open which the really things to flows I

start then we if out demand of that out could you start and maybe of direction to be on maybe some and those think buyers positive. things, China. the then I farther curve to these both sellers go of growth see So, around get see some And

Operator

the And Chris Shaw from comes you. Hardt. next with Thank question Monness, Crespi,

Chris Shaw

crush lingering impacts how business, of what it overall whole just did sort program, can fully dollar source quarter on how But just guys understand assume of touched both market for South in that? it on broadly, American Argentina. there very why impact any the for the specifically. might program. of the briefly, in -- volumes been of of that on the have the market I just and is sort I that -- more maybe you for like what curious -- the you general. you -- and is just did -- had Just But effects have lower Argentinian soy the that that that were seems and that

Greg Heckman

Yes. not It volume. farmer a commercializing definitely big had had been impact, The soybeans. right? had hard That on been their

soy the program happened. And than also to allowed forward, for only needed export, was dollar not and reestablish them So the crushing that of industry more anyone into the lot going but some beans farmer what commercialized we ourselves expected. beans a we quantities saw that move the the saw with that here export

was on helpful that So term. the near

holding will also there. that them once they'll they've We're course, That completely and Of they've quit over have across, now but selling. farmer, little had now a see the opportunity, what's on wait next. dry now

they're, ourselves some for good So we But margins, you be of if pulled right got crush replacement to of able now. here look We've selling. while. that forward positioned the to not course, at a

be wave the next the better of So, in we'll farmer and will the see about going comes, selling weather something that or either when forward. and feeling government-driven S&Ds overall improving

Chris Shaw

then was that did so doing Brazil just exports? much because depress out in program, Argentina you the of including were had they business when -- And there coming

Greg Heckman

time but of the tightening between of little because was and in North Brazil, a things interplay dryness River right always and the America There's were about concerns Argentina that Mississippi system. where North the kind at the up in America

levels in lower actually think I saw lowest XXXX. or we river the than back

export filling And of that got that that some so, export where gap out pushed actually may that out of later. North American some now was pushed be

the fell in So, although global little was kind there fell planning. think was a line, careful from kind of fortuitous. I any don't standpoint, actually things It -- a of bit

Operator

comes the Montreal. And Zaslow Bank question of you. with from Ken Thank next

Ken Zaslow

like about how run about you're $XXX then, next To Trying on over and higher, million It you're go at align. possibility figure rate baseline you of it, seems to refined I that kind can margin, there's look that talk $XXX think two to that that indicating margin couple at $XXX when of can I those progresses And would a $XXX I baseline. just a but think million, of number your touch actually years? million that, out kind of million. of the how actually the base oil

So, figure I was just out. to that trying

John Neppl

that at we're Ken, don't Yes, not a we on next that I And line. think for expect built point, back we years, robust happen baseline, couple some just the to margins oil necessarily premise that's not assumption $XXX to do -- baseline was a the straight will. fact, we're pretty certainly, predicting refined historical think And levels. certainly. for to I future. saying the foreseeable that our that that that's going in go are here environment in your it point, it's And that, of expect margin And a in not our to refining

us. may it gives get now, continue more get some the margin them and us that just have that's well an not, than slower bit their their on see the mean opportunity build other closer we the and imbalanced and right all we're that It have alternatives to pretreatment think and may little historical built to capability, point. with down revisit gets things we'll And levels. pretreatment refiners to production to own customers saying to building very more good road at side, But decline that S&Ds I And on for work so, been those could if own. the a see. we I

Greg Heckman

Yes.

working work different is think I pushes really new some they are it, -- more think should affect the yes, at to or if and And their talked That's Those confidence bit to of got of then and we costs projects so not And developing. figure build I John a gives not. parties. the these being catalysts little whether that talked future. we've stopped. the the build, costing but all the in think out different their develop. of market they little economics, a their out least economics heard affect We're quantity. got with rumors and oils. we'll feedstocks work taking into this We've that we've and on pretreatment delayed it And continue multiple as what build industry that's the see to some are the us how a longer I mac more, and one about refineries

where positioned. we we're So, like

Ken Zaslow

that right, for process understanding of refined a go think, When is time. I you for a guys you renegotiate process, that it oil, and -- period in, my a there's through lock the negotiation you

you don't So, does is Or will XX actually out? of months, know there another process? It more opportunity. six kind months, play the next months, be there another how to that reset three if is. negotiation? it's as Is I just go there whatever it seems in like

Greg Heckman

they're to whether flat the how lock they right? Well, think the you comfortable think they than in it on want whether more buying I lot the whether about customers, think I they don't on or of are. the or a fuel price or spot different curve or depends lock customers, Company, them want in feed on customers out far food to overages

I can company. don't really generalize. think It's So, we by company

we've we right out Refined side booked than Specialty And have in on going At business feedstock, normal is booked got it more be will more volumes And extend go the constantly -- normal. and it's out QX. times, markets you've where or and on shorter So slightly markets rolling. what our is than price kind and further. into sometimes of end Oils continually depending it But spot here continually on XXXX go more got and/or their forward. can now

calling the in $XX.XX. our some least that's so, of And confidence at

Ken Zaslow

how any that And question was globe rates, your there Okay. the place on do thought of And that? you Were is, capacity -- you kind were underutilized? you competitor the then your capacity because you my largely think largely quarter? How about during utilization I last because around said wanted used was same think you I'll and a that just bit did idling there world, little there. were to you're And operating I touch around have guys just efficiently, the so plants base said you the and some more impact? of that, -- you leave shutdowns it guys on that

Greg Heckman

in at Yes. global. We look total the

the marketing, always the had better, in farmer shut total, capacity in as more talked because we'll down and of of energy coming total Europe, hard. to 'XX. see if we some got it executed run volume We've Argentina, But we we about were tough into that China, total in we're then team it be add globally, hard. been was the took capacity not have run as there in Ukraine. So to quite we And return up proud didn't Margins then managing can of opportunities better you as think run that yes, way sure, being We're volatility fantastic. and the we quite China. ran there the that of advantage when right, utilization. in expect have so we're the demand could our we seeing I the But said, And be yes, right? And margins margins there better. do animal in had been that start

challenging And security chain manage successful. world so, and value that, and of focused our very customers ends continue help to what's to we'll be the at dynamic both we're help a food stay people and proud of in

Operator

Heckman turn Thank any you. like I floor would for closing the session. And to this Greg comments. to concludes the question-and-answer

Greg Heckman

especially I'd light commitment be execution market the proud environment. of team's say current the and to so you. of in Thank continue just their we

to So opportunities. we've very the the of continue proud our on model at Bunge ability got to here and capitalize

thank much, you a everyone, have and day. So great very

Operator

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

You may lines. your now disconnect

Bunge Limited (BG) 26 Oct 222022 Q3 Earnings call transcript