Earnings call transcript: Bunge Q2 2025 sees strong EPS, stock dips slightly

Bunge Limited (BG) reported its second-quarter 2025 earnings, showcasing a significant year-over-year increase in earnings per share (EPS) to $2.61 from $0.48 in Q2 2024. However, adjusted EPS saw a decline to $1.31 from $1.73 in the previous year. Despite these mixed results, Bunge maintained its full-year adjusted EPS outlook of approximately $7.75. Following the earnings announcement, Bunge’s stock experienced a slight decline, with a 0.54% drop in regular trading and a 0.47% decrease in aftermarket trading.

Key Takeaways

• Bunge completed a merger with Viterra, enhancing its position in the agribusiness sector.
• The company maintained its full-year EPS guidance at $7.75.
• Soy crush margins showed regional variation, with Brazil performing particularly well.
• Bunge experienced a decline in soft seed margins across all regions.

Company Performance

Bunge’s performance in Q2 2025 was marked by a substantial increase in reported EPS compared to the same quarter last year, although adjusted EPS decreased. The company has been focusing on strategic initiatives, such as the merger with Viterra, to strengthen its global footprint. Despite challenges in certain regions, Bunge remains the largest and lowest-cost crusher in Argentina, which is expected to bolster its competitive edge.

Financial Highlights

• Revenue: Not specified in the earnings call summary.
• Earnings per share: $2.61 (up from $0.48 in Q2 2024).
• Adjusted EPS: $1.31 (down from $1.73 in Q2 2024).
• Adjusted segment EBIT: $376 million (down from $519 million last year).
• Generated $693 million in adjusted funds from operations year-to-date.

Outlook & Guidance

Bunge has maintained its full-year adjusted EPS forecast at $7.75, indicating confidence in its strategic direction. The company expects stronger processing performance in Q4 2025 and anticipates a conservative merchandising forecast. Bunge is projecting a 30/70 earnings split in the second half of the year, with improvements expected in refined specialty oils.

Executive Commentary

CEO Greg Heckman expressed satisfaction with the completion of the Viterra merger, stating, "We’re very pleased to have completed our combination with Viterra." He emphasized the strengthened position and increased flexibility of the combined company, noting, "We will have a stronger, better-positioned company with even greater flexibility."

Risks and Challenges

• Soy crush margins, although improved in some regions, remain a concern in others, particularly China.
• Soft seed margins are down across all regions, which could impact profitability.
• The integration of Viterra presents potential challenges in achieving cost synergies and operational efficiencies.
• Global market dynamics, including biofuel policies, could affect vegetable oil markets.
• Macroeconomic pressures and supply chain disruptions remain ongoing risks.

Q&A

During the earnings call, analysts inquired about the potential impacts of the Renewable Volume Obligation (RVO) on Bunge’s operations. There was also a focus on soybean meal demand and export capabilities, as well as potential shifts in the vegetable oil markets due to biofuel policy changes. These discussions highlighted investor concerns about regulatory impacts and market dynamics affecting Bunge’s future performance.

Full transcript - Bunge (BG) Q2 2025:

Drew, Conference Operator: Good morning and welcome to the Bunge Global 2nd Quarter 2025 earnings release and conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing Star, then Zero on your telephone keypad. After today’s presentation, there will be an opportunity to ask questions. To ask a question, you may press Star, then One on your telephone keypad. To withdraw your question, please press Star, then Two. Please note this event is being recorded. I would now like to turn the conference over to Mark Hagen, Vice President of Investor Relations. Please go ahead.

Mark Hagen, Vice President of Investor Relations, Bunge: Thank you, Drew. Thank you all for joining us this morning for our second quarter earnings call. Before we get started, I want to let you know that we have slides to accompany our discussion. These can be found at the Investor Center and our website on bunge.com for events and presentations. Reconciliations of our non-GAAP measures to the most directly comparable GAAP financial measure are listed on our website as well. I’d like to direct you to slide two to remind you that today’s presentation includes forward-looking statements that reflect Bunge’s current view with respect to future events, financial performance, and industry conditions. These forward-looking statements are subject to various risks and uncertainties.

Bunge has provided additional information in its reports on file with the SEC concerning factors that could cause actual results to differ materially from those contained in this presentation, and we encourage you to review these factors. On the call this morning are Greg Heckman, Bunge’s Chief Executive Officer, John Neppl, Chief Financial Officer. I’ll now turn the call over to Greg.

Greg Heckman, Chief Executive Officer, Bunge: Thank you, Mark, and good morning, everyone. Before we get started, I just wanted to mention you may have noticed Mark’s now leading IR, and I wanted to give a quick thank you to Ruth Ann for her years of service in IR, and she’ll now be leading our Government Affairs team globally, so they’ll still be working closely together. Welcome. This is a pivotal quarter for Bunge, and I want to begin by thanking the team for continued focus and execution. We successfully navigated a highly complex period both internally and externally and delivered better-than-expected results for the quarter, especially given the market conditions. The team continues to demonstrate agility in an ever-changing environment while also making significant progress against our strategic priorities. We’re very pleased to have completed our combination with Viterra earlier this month.

Creating the premier agribusiness solutions company positioned to address some of the most pressing needs of the 21st century for farmers and consumers across food, feed, and fuel. This has been a long time in the making, and we use that time well. We’re refining our integration plans and preparing for execution. Now that the combination is complete, teams are moving quickly to identify and capture cost savings, along with commercial opportunities we couldn’t pursue before closing. We are already moving to implement logistical and transportation efficiencies, with potential to reduce expenses between origin and destination. These are durable synergies that will benefit everyone across the value chain. Our teams have hit the ground running, and I’ve been impressed by the seamless collaboration, partnership, and unified sense of purpose across the company. We remain as excited as ever about our path ahead.

Viterra brings a very talented team and a robust network of strategically positioned assets. As we move into the integration phase, we are leveraging core aspects of the playbook that has served Bunge so well over the past several years. We’ll move quickly to apply many of the same proven standardized approaches to reach the full potential of our combined company. This includes utilizing the value chain operating model, our global functional centers of excellence, and structuring our reward system to ensure our teams are working together toward the common goals of our global company, while always staying aligned with our shareholders. We are applying a global approach to risk management. That aligns with the earnings power of our combined company and today’s environment. Positioning us to better capture value from our expanded global asset base. While prudently allocating risk to the best opportunities.

As we integrate these two highly complementary businesses, we’re optimistic about the value we will generate. With the rigorous integration planning that’s been done, we have a clear path to bringing our companies together, capturing meaningful efficiencies and operational synergies. I’m especially excited about the potential commercial synergies. We are already identifying opportunities to run a more efficient processing and logistics network. Using our combined information to better manage risk for Bunge and our customers. It’s been great to see the teams working quickly to identify and tackle these areas together. Beyond Viterra. We continue to focus on our broader strategic priorities, including ongoing portfolio optimization. Earlier this month, we announced the completion of the sale of U.S. corn milling. Which further simplifies our business along our global value chains. Shifting to our operating performance, our second quarter results were largely driven by better-than-expected processing results in South America.

With higher margins in Brazil and Argentina. Combined and specialty oils were negatively impacted by uncertainty related to U.S. biofuel policy. John will go into more detail about the second quarter financials in a moment. Looking ahead, we are maintaining our full-year adjusted EPS outlook of approximately $7.75. For the legacy standalone Bunge. This no longer includes the second-half earnings from our corn milling business due to its sale, which closed on June 30th. With that, I’ll turn it over to John for a deeper look at our financials and outlook. John?

John Neppl, Chief Financial Officer, Bunge: Thanks, Greg, and good morning, everyone. Now let’s turn to the earnings highlights on slide five. As Greg mentioned, the second quarter exceeded our expectations primarily by processing. The team’s execution allowed us to benefit from late quarter market volatility. Our reported second quarter earnings per share was $2.61, compared to $0.48 in the second quarter of 2024. Our reported results include a favorable mark-to-market timing difference of $0.69 per share and that favorable impact of $0.61 per share for notable items, consisting of an $0.87 gain from the sale of our U.S. corn milling business, offset in part by $0.26 transaction and integration-related costs related to Viterra. Adjusted EPS was $1.31 in the second quarter versus $1.73 in the prior year. Adjusted segment earnings before interest and taxes, EBIT, was $376 million in the quarter, which was $519 million last year.

In processing, high results in South America, as well as Brazil and Argentina, benefited from large soybean crops and fruit farmers selling, with high results in Asia, more than offset by lower results in Europe and North America. In merchandising, improved performance in global grains and oils, more than offset by lower results in our financial services and ocean freight businesses. While largely driven by North America and Europe, results in refined and specialty oils were down in all regions, reflecting a more balanced global supply and demand environment and uncertainty in U.S. biofuel policy. Milling, higher results in North America, more than offset by lower results in South America. In corporate and other, decrease in corporate expenses was primarily driven by performance-based compensation. Prior year other results include a loss of $21 million from our distributed bioenergy joint venture that we divested in the fourth quarter of last year.

Net interest expense of $60 million was down in the quarter compared to last year due to lower average net interest rates, increased capitalized interest on capital projects, and higher interest income from investments in interest-bearing instruments. Decrease in income tax expense for the quarter was primarily due to lower pre-tax income in 2025. Let’s turn to slide six, where you can see our adjusted EPS and EBIT trends over the past four years, along with the trailing 12 months. Over this period, our team has excelled in managing a variety of different market environments while also executing on numerous internal initiatives, most notably Viterra integration planning. Recent performance trend reflects a more balanced global supply and demand environment and the impact of ongoing trade and biofuel uncertainty that has created a very spot market environment. Slide seven details our capital allocation.

Year to date, we have generated $693 million of adjusted funds from operations. After allocating $133 million to sustaining CAPEX, which includes maintenance, environmental health, and safety, we had $560 million of discretionary cash flow available. $185 million in dividends and invested $583 million in growth and productivity-related CAPEX. We also received $776 million of cash proceeds related to the sale of our U.S. corn milling business, the sale of an interest in our soy crush footprint in Spain to Repsol, and a final payment for the sale of our interest in the sugar and bioenergy joint venture that closed in 2024. This resulted in approximately $570 million of retained cash flow. Moving to slide eight. At year-end, readily marketable inventories, or RMI, exceeded our net debt by approximately $2.2 billion.

Our adjusted leverage ratio, which reflects our adjusted net debt to adjusted EBITDA, was 1.1 times at the end of the second quarter. Slide nine highlights our liquidity position. At quarter end, we had committed credit facilities of approximately $8.7 billion, of which approximately $7.6 billion were unused, providing ample liquidity to manage the ongoing capital needs of our larger combined company. In addition, we had a cash balance of approximately $6.8 billion in anticipation of our merger with Viterra. I would also like to point out that following our closing of Viterra, S&P upgraded our credit rating to A-, reflecting our improved business risk profile and a step change in our scale and diversification. Please turn to slide ten. For the trailing 12 months, adjusted ROIC was 8.4%. And ROIC was 7.4%.

Adjusting for construction in progress for large multi-year projects not yet operating, and the excess cash on our balance sheet at Viterra closing, adjusted ROIC increased by 1.6 percentage points and ROIC by approximately 1 percentage point. Moving to slide 11. In trailing 12 months, we produced discretionary cash flow of approximately $1.1 billion. Cash flow yielded 9.8% compared to our cost of equity of 8.2%. Please turn to slide 12 in our 2025 outlook. As Greg mentioned in his remarks, taking into account second quarter results, current margin of macro environment, and forward curves, we continue to forecast full-year 2025 EPS of approximately $7.75. This forecast no longer includes second-half earnings for the corn milling business due to the sale on June 30, and also excludes the impact of Viterra which closed on July 2.

In agribusiness, full-year results are forecast to be higher than our previous outlook driven by processing but remain down from last year. Combined and specialty oils, full-year results are expected to be down from our previous outlook, reflecting the softer second quarter performance down from the last year. In milling, full-year results are expected to be down from our previous outlook, reflecting the sale of corn milling, but still in line with last year. In corporate and other, full-year results are expected to be in line with our previous outlook but favorable to last year. Additionally, the company expects the following for 2025. Adjusted annual effective tax rate in the range of 21%-25%. Net interest expense at the lower end of the range of $220 million-$250 million. Capital expenditures in the range of $1.5 billion-$1.7 billion. And depreciation and amortization of approximately $490 million.

Prior to reporting third quarter earnings, we anticipate providing a forecast for the combined company, along with the historical Bunge information included in a new segment reporting structure that will be used going forward for the combined company. With that, I’ll turn things back over to Greg for some closing comments.

Greg Heckman, Chief Executive Officer, Bunge: Thanks, John. Before we go into Q&A, I just wanted to offer a few closing thoughts. When we first announced our combination with Viterra two years ago, we saw opportunities with the combined company to accelerate our strategy, enhance our diversification across crops and geographies, and increase the impact of our investments. Those same benefits hold true today. They’re especially relevant as we navigate the current macro environment. With the greater diversification across assets, geographies, and crops, more data to provide us insight into supply and demand dynamics, we’re even better positioned to serve our customers at both ends of the value chain, regardless of the market environment. With the increased scale of our platform, we will get a better return on investments to further improve our business, including technology in areas such as data analytics to enhance supply chain transparency, logistics planning, processing efficiency, risk management, and decision-making support.

I’m confident that we have the right people, platform, and strategies in place to deliver value for our stakeholders, from farmers to consumers across feed, food, and fuel markets. We will have a stronger, better-positioned company with even greater flexibility and resources to address global food security and renewable energy needs. With that, we’ll turn to Q&A.

Drew, Conference Operator: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question comes from Andrew Strzelczyk with BMO. Please go ahead. Mr. Strzelczyk, your line is open. Is it possible your line is muted accidentally? Okay. We’ll move to the next question then. The next question comes from Puran Sharma with Stevens Inc. Please go ahead.

Good morning, and thanks for the question. Just wanted to start off by just asking about the soy crush performance throughout the quarter in your regions. You provided a little bit of detail in the press release, but just wondering if you could flesh that out a little bit. As we look to the back half of the year, how should we think about fundamentals, especially with the recent RVO in mind? My follow-up would just be in regards to the SREs. Have you heard anything? How soon do you think we can get an announcement? How have your conversations been regarding this matter? Any sort of details you could provide there would be helpful. Thanks.

Greg Heckman, Chief Executive Officer, Bunge: Sure. I’ll start, John. You can come in. Yeah. As far as Q2, look, the outperformance that was almost stronger than we expected came really kind of second half June. And that was South America and North America processing margins, really driven by the rising veg oil values and lower bean costs, and primarily in the U.S. That was what really delivered that. As you look kind of towards the current market conditions, looking across soy, while Q3 improved a little bit, it’s still kind of unclear due to continued soft bio demand and South American supply. Margins definitely are better in Q4 and back above baseline with the harvest outlook that’s coming. If we walk quickly around the globe, if you look at Brazil, Q2 margins are better year over year. There’s no logistical challenges with take or pay now.

You’ve got a record bean crop, and of course, that’s offset a little bit by some of the demand of exports of beans to China, and then the deferral of the B15, which we’ll see coming in in the second half. We expect that second half to be better year over year, and oil demand, of course, is expected to pick up from energy, although we haven’t seen it yet. In Argentina, Q2 margins have been better year over year. That was strong farmer selling driven by the big crops and the export window looking like it was coming to an end, and so that got the industry well covered for Q3, and Q4 is yet to play out. Across Europe, our Q2 margins were good, but down slightly from a strong prior year.

Second half will probably be a little tougher if you’ve got some competing imports from the South American flows. In China, our Q2 margins improved in the second half, although they were still slightly down from prior year. Second-half margins will probably be lower than Q2, but still look pretty good versus historical levels. That’s the look on soy. On soft, Q2 margins and volumes were down in all regions versus prior year, and that was really as across Europe, Black Sea, Canada, we had smaller seed production last year. Crops are developing well in all regions, and you see that as the forward crush curves are supported starting late Q3, as we’re expecting arrival of new seeds.

John Neppl, Chief Financial Officer, Bunge: Yeah. In terms of the SREs, obviously, we’ve been plugged in pretty closely monitoring that. I think our belief is the administration has done a great job of supporting the U.S. farmer, and we think they clearly understand the impact of what the SREs could potentially have on the RVO. We probably don’t have any special insights into where it’s going to end up, but we do expect a decision sometime in August or September. Again, I think just given the supportive nature of the policy around 45Z and around RVOs, we would expect the SREs to be well thought through and supportive.

Greg Heckman, Chief Executive Officer, Bunge: Appreciate the call.

Drew, Conference Operator: The next question comes from Andrew Strzelczyk with BMO. Please go ahead with your question.

Greg Heckman, Chief Executive Officer, Bunge: Hey, good morning. Can you hear me now?

Yes. Good morning.

Good morning, Andrew.

Wonderful. Sorry about that. I know you’re going to give the combined company Viterra guidance, including Viterra, before the third quarter call. You put out some pro forma numbers, including Viterra, that I think have created some concern. I know there’s some noise in there. I was just wondering if you’re able to help us kind of think about what a clean Viterra earnings base for 2024 would have looked like, or some of the factors that impacted kind of the underlying Viterra earnings. Numbers in that pro forma that you shared, or maybe if you wanted to compare 2026 fundamentals for Viterra versus 2024, if you see the environment on a relative basis getting better or worse, just some color around that would be helpful.

Sure. Let me start, and John can come in. Look, I’d just like to start by saying, look, Viterra’s got a great team and an excellent platform, and the strategic rationale is absolutely still in place. As far as prior to close, I’d say John and I in our past life have walked that path, so we probably have as good an understanding about that as anyone. It definitely was a challenging time, no doubt, for the team. You’re moving a private company into a larger public company, which we’d lived before. We had the regulatory delay. We understand how disruptive that can be to the team and the business. I think the good news is we understand what those challenges were. There’s really nothing we haven’t seen before. We know how to address those going forward.

When you look at the combined company going forward, look, biofuel policies and large crops are generally supportive of our crush assets. You look at the storage assets now the combined company has. Those benefit from large crops globally, not only in the storage, but in the optionality then when the demand calls for that stored product. You look at our new combined expanded network, it’s much more balanced now between crush and origination, how the origination from the farmer to support our assets fits so well together. It’s really a vertical merger if you think about it. That’s really going to increase commercial optionality for us. The other is we’re now the largest and lowest-cost crusher in Argentina, and that’s right as that country continues to stabilize. It’s important to the overall crush franchise. We really love the combination.

Kind of regardless of what cycle we’re in going forward, what we do know is the combined business, we are very, very comfortable and we’ll have higher lows in the tough cycle and higher highs as we get into mid and better cycles.

John Neppl, Chief Financial Officer, Bunge: Yeah. I would just add on, Andrew. When you look at the pro formas, I mean, they do not have synergies captured. They have costs and they are related to the deal. I think the Viterra team would tell you that they could have executed better in some ways. I think these are things that are easily fixed. Obviously, we were hyper-focused on synergies going forward, both on the cost side and on the commercial side. Everything we are seeing so far there gives us optimism that we will get every dollar synergy that we forecast, if not more on the cost side, and certainly going to be as aggressive as we can be, while still supporting the business comfortably, obviously. On the commercial side, as Greg alluded to, I think there is some great opportunity there that we will see going forward.

Greg Heckman, Chief Executive Officer, Bunge: Okay. That’s super helpful. I apologize if this was already asked, and I might have missed it, but I guess I’m curious. I mean, we can see in the U.S. crush curve post the RVO how things have evolved. How are you thinking about the implications kind of on a more global basis with the U.S. potentially out of the global market for bean oil and maybe how you might see the ripple effects play out through the crush margins in Brazil and Europe and Argentina, kind of relative to what we’re able to see in the U.S.? Thanks.

Yeah. If you look back, kind of the first run when oil share was as strong. In the U.S. with the draw from biofuels, right, we’ve got a bit of a test run, if you will, for our global system. The key, I think, this time is we’ve got even a better, more complete system. As you’ve seen when we’ve been challenged with whatever macroeconomic situation the last few years, we’ve been able to adjust to that, whether it’s being there to buy the beans from the farmers or to serve our customers from the best market with meal or from the best market with oil. We see this as a great opportunity. I think the other key is B15 is coming in in Brazil. That’ll balance some of the demand there on oil as well as the demand that we see coming in North America.

We’re excited to run this combined platform in what’s a pretty complex macro environment, but we know we’re well suited for it.

Great. Thank you very much.

Drew, Conference Operator: The next question comes from Ben Toyer with Barclays. Please go ahead.

Yeah. Good morning, and thanks for taking my question. Just wanted to squeeze in two quick ones. One, as you look into the back half, and obviously, you made some adjustments for the divestiture of the corn milling business in North America. Now, that put aside, as you look into the second half versus what you initially expected for the second half, has anything materially changed to the up or the downside just given that there’s a little bit of a stronger crush environment, particularly in North America? That would be my first question.

John Neppl, Chief Financial Officer, Bunge: Yeah. Ben, I can take that. I think overall, while we’re holding the year, and we look at the second half, just to be clear, we’re going to have likely a weaker Q3. Given by the fact that we had a lot of our crush margin locked coming into the quarter and some of this run-up we saw recently in crush margin in the U.S. Capture a little bit of that in Q3, but most of it we were already locked. We are really looking at a second half kind of a 30/70 split of earnings, second half. I would say, while we are predicting and we’re forecasting a stronger processing in the second half, primarily in Q4, driven by the improvement in crush margins, especially in the U.S., we’ve got offsets in other parts of the business. Merchandising continues to be challenging, and I think tough to predict.

We have a conservative forecast in, we think, for merchandising, and we’ve seen a little bit of softness on the specialty oil side. Overall, kind of a shift to more of the processing side away from parts of the business.

Greg Heckman, Chief Executive Officer, Bunge: Okay. That brings me actually to my second question on the oil piece because that seems like that was probably a little bit softer than what you initially expected for the quarter. I mean, the tone for the guidance is a little weaker. Just wanted to understand, what are the issues here? Is it too much supply, or is it not enough demand, or is it a combination of both of it?

Yeah. If you look at the RSO, definitely was impacted by the lower energy demand due to the uncertainty around the biofuels policy. We also saw customers with some of the uncertainty around tariffs until those get set. Customers going very spot. That definitely affected some of the flows. We are expecting the RSO to improve coming off the Q2 levels in the second half.

Okay. Perfect. Thank you.

John Neppl, Chief Financial Officer, Bunge: Ben.

Drew, Conference Operator: The next question comes from Salvatore Tiano with Bank of America. Please go ahead.

Greg Heckman, Chief Executive Officer, Bunge: Yes. Good morning. Firstly, I want to ask a little bit about your investments, the organic investments that you have for the next couple of years, including, I believe, Morristown is supposed to come online later this year. How is the Destrehem crush expansion going? If you can provide any commentary with regard to CapEx there, expected earnings contribution, and progress.

John Neppl, Chief Financial Officer, Bunge: This is John. I’ll take those. Morristown is moving along extremely well. We’re going to basically go into commissioning and go live on that plant in, expecting in October, so call it mid-Q4. Really pleased about the progress we made there on getting ready to go. It’s obviously going to take a bit of time commissioning. It’s a big plant. It’s a bit complex. It takes time to work through the bugs initially, but really pleased and have an expectation I think will be humming by early to mid next year with, again, a start probably call it mid-Q4. Destrehem, both projects in Destrehem are moving along well. Of course, we have the crush project that’s in our joint venture with Chevron. We’re expecting that to come on probably, call it late Q2 of next year.

Then followed probably about a month later by the barge unloading project, which is a 100% owned project. Both going along well. Largely, obviously, most of the CapEx will be complete on those three projects by the end of this year. A little bit of spillover on Destrehem, two Destrehem projects into next year, in the 2026 first half. The other big project we have, of course, is our Weston plant in Europe. That’s probably been delayed a bit just given some contractor issues. Looking probably at early 2027 commissioning on that plant versus late 2026 at this point. I would say all in all, the projects are moving along well, and teams are doing it safely and effectively. We’re optimistic that all these are going to be good projects when wrapped up.

Greg Heckman, Chief Executive Officer, Bunge: Perfect. The other thing I want to ask is, what is your outlook, I guess, on the meal side in the U.S., both on demand, whether that’s domestic or on the export market, but also supply? Obviously, we’re talking with the RVOs about the improved outlook for the oil side. It looks like we’re still adding probably a good 10-15% to meal supply in North America in the next two years, and obviously, prices there are moving lower.

Yeah. I think the key is to continue to watch their good economics in the animal protein segment. Demand has been very good. They like using soybean meal and prices itself into the formula. The other factor is that North America has added some export capabilities. We have a lower supply chain cost to get from the interior plants to the export and get it on a ship, making the U.S. more competitive in the global markets as well. If you remember, we sell more soybean meal than we produce. We are a net short. We are able to find the best market for that, whether it is being consumed domestically or going to our customers in the global market.

John Neppl, Chief Financial Officer, Bunge: Salvatore, just note that we’ve seen the meal situation coming, obviously. The expansion of our Destrehem barge unloading facility and the expanse we did at our P&W facility are both intended to take on some of that soybean meal that’s going to go to export.

Greg Heckman, Chief Executive Officer, Bunge: Great. Thank you very much.

Drew, Conference Operator: The next question comes from Heather Jones from Heather Jones Research. Please go ahead.

Greg Heckman, Chief Executive Officer, Bunge: Good morning. Congratulations on closing the tariff.

Good morning. Thank you.

Yeah. My first question is on your RSO business. Just assuming a relatively benign SRE outcome. Demand for North American veg oil set to explode. The vast majority of your big RD producers now have PTUs in place. I am just wondering, do you think this is going to set up a situation in which refining margins could potentially go to zero in the U.S.? If so, your outlook for the rest of the world, would that still allow for a normalized EBIT target of about $400 million? I think it is what y’all laid out in 2022.

Let me start. I’ll let John come back. Remember when we talked in the past that we expected the refining margins to moderate over time, and that was always our plan. Some of that will work back into the crush margin because the demand for crude, of course, will go up. Kind of depending on that balance, who’s running, how hard they’re running the pretreatment, will make a difference on where the refining margin falls out. It probably will keep it tighter than historical, but not long-term historicals, but not better than kind of the peak period. Of course, if you remember, we had it much lower in our model.

John Neppl, Chief Financial Officer, Bunge: I would just add, Heather, that if you look at the last couple of quarters, the amount of refined oil going into energy has been significant to our overall portfolio. Demand still has been solid on the food side, and that we would expect to continue. We will see what the things ramp up on the RD side. We will see what kind of demand is there. Just to point out, by far, most of our refined oil is going into the food industry.

Greg Heckman, Chief Executive Officer, Bunge: Okay. A follow-up one is, like you mentioned, Greg, about the demand for crude oil is obviously going to skyrocket. Just thinking of the interplay between those, maybe refining margins get really compressed in the U.S., but how do you think about the normalized range for soy and soft crush margins, given that crude oil demand is going to surge and you’re also going to have this very large meal production? I know we will not know until we know, but just how are y’all thinking about that setup, the potential there?

Yeah. I mean, I think we’re encouraged. You got big bean crops. You’ve got good animal profitability on the meal takeaway and inclusion rates. You’ve got the biofuel policy with the RVO being constructed in the U.S. You got the B15 coming on in Brazil. From an overall setup, exactly how it’ll play out, we’ve got our theories, but the one thing I’m really glad is that we’re running what is now a pretty balanced global crushing footprint in soy and soft. I think we feel the balance of supply and demand is going to be pretty good. I think we’ll be able to most efficiently serve it from the best origins.

Okay. Thank you so much.

Thank you.

Drew, Conference Operator: The next question comes from Derek Woodfield with Texas Capital. Please go ahead.

Good morning, Allen. Thanks for taking my questions.

Good morning.

Similar to Heather’s question, given the meaningful step up in domestic SBO demand for fuel, how do you see the interplay between SBO and other seed oils as it relates to food in the U.S.?

Greg Heckman, Chief Executive Officer, Bunge: Yeah. As I said, I think the good news is we’ve seen a bit of a test run on this. As market tightens up on the demand, you have certain food customers that will switch to other oils. Some of that’s functionality. Some of that’s from a price standpoint. We’re working with those. We like being able to offer the full suite of the seed oils to our customers. We see it as opportunities.

Terrific. With regard to the one big, beautiful bill, it appears 45Z policy will have a longer and greater impact on SBO economics based on the removal of the indirect land use charge. Do you guys have a sense of how material ILEC is on average? As a build on that from an OBB perspective, have you been able to quantify how material of a help to 100% bonus depreciation is to your business?

John Neppl, Chief Financial Officer, Bunge: Yeah. Starting with the ILEC change, that’s obviously going to, number one, we’re very pleased that the 45Z includes all North American feed stocks. That benefits our crush in Canada as well on the canola side. The indirect land use change impact is going to be significant because it really puts soybean oil and canola oil much more on par with the lower CI feed stocks. When you think about the prevalence of soybean oil and the ease of moving it in large quantities, it’s going to be very price competitive, but also it’s a much easier feed stock to process. We think it’s going to bode well for demand for crude, certainly crude soybean oil, crude canola oil. See about the refined side as we talked about earlier. Still think there’s going to be some good demand there. All in all, pretty positive on that piece.

Accelerated depreciation side, clearly, where we have an opportunity to take advantage of it, we will on some of these bigger capital projects. I don’t know that it will necessarily change strategy around CapEx, but it certainly is going to be a tailwind as we see opportunities.

That’s helpful. Thanks for your time.

Drew, Conference Operator: The next question comes from Stephen Haynes with Morgan Stanley. Please go ahead.

Hey, good morning. Thanks for taking my question. I wanted to ask on some developments in the global trade market with China taking some soybean meal from Argentina and sending some soybean oil into India. I guess not typical behavior from them. Are these kind of one-off weird kind of moves, or do you think there’s kind of just more of a structural change going on? Just curious on any thoughts there. Thank you.

Greg Heckman, Chief Executive Officer, Bunge: I think the one thing the last five, six years have taught us is that the world’s a pretty dynamic place now. I know I’m repeating myself, but it’s why we love our balanced global footprint of crushing as well as origination. I think China’s very public that they’re focused on food security. I think it’s absolutely logical and rational that they continue to build different optionality. I would say the importation of soy meal is a new option that they’re now developing. It seems like a logical and rational action. As far as commodities moving in untraditional flows, I think that’s the norm now. I think that’s a norm going forward. I really feel that Bunge’s built for it.

Fair enough. Appreciate that. Maybe just on the commercial synergy side, I realize it’s early days. Do you have kind of a timeline roughly for when you think some of these could be realized? I’m sure there are some that are more low-hanging that could be immediate, maybe some that are a bit longer term. Any way to help us think about, at a very, very high level, how to just kind of conceptualize when you could start realizing some of those synergies?

Yeah. Look, it’s too early to put any new targets out there, but let me say we’re very optimistic. Our goal all along has been to deliver more than we promised and deliver them faster than we promised. That is what we’ve got the team focused on. There’s no doubt, though, when we start thinking about the commercial synergies, just the global scale that we’ve got now and with the local granularity, whether it’s on originating from farmers or distributing to end customers, the capabilities that we’ve got on the logistical and transportation side, the ability to manage our risk and help our customers manage their risk so that we can be the partner of choice. That’s exciting. I tell you, just since we’ve closed, I’ve had the opportunity to sit with the commercial teams and some of the functional teams as we’re now one team, one company.

The way that people are working together has been fantastic, right? Everybody is really transparent and collaborative. We’ve dropped the ego. We’re focused on earnings is what we’re focused on. Hearing the teams and the opportunities that they’re finding together in the plans. Look, it takes some time to execute. As we had teams together here in North America a couple of weeks ago, I was in Europe all last week listening to the teams and work and hearing the report out to the working sessions. I’m excited about it. I’m really excited. It’ll take some time to do, but the reason that we did this deal, they’re all still in place.

John Neppl, Chief Financial Officer, Bunge: Yeah. I would just add, Stephen, that I think the first focus item for the commercial team was one voice to the market. I think Greg mentioned the team set aside who was doing what, and we figured out very quickly what’s the right approach in every market that we’re in to make sure we’re one voice to the customer and both ends, the farmer on one side and customers on the other. We could not be more pleased with the coordination among the teams that are just now starting to figure out what the real opportunities are.

Okay. Thank you.

Drew, Conference Operator: The next question comes from Manav Gupta with UBS. Please go ahead.

Manav Gupta, Analyst, UBS: Hi. I wanted to ask about the shareholder returns post the closure of the deal. How much is remaining under the buybacks? Could you accelerate the buybacks to offset the dilution from the Viterra deal?

John Neppl, Chief Financial Officer, Bunge: Yeah. Manav, thanks. This is John. The original $2 billion commitment, we have $800 million left. Obviously, that’s going to be an important part of our capital allocation here going forward. We’ve anticipated that all along. We have a big outflow of cash relative to getting the deal closed. It’s always been built into that. Obviously, we’ve talked to the rating agencies about our plans there, and we expect to execute on that fairly soon. We’ll see. I mean, technically, we have a period of time post-close to do that. We’ll look for the right opportunities to execute on that remaining balance. Going forward, we do expect this machine to generate a lot of cash going forward once we hit our stride. Capital allocation in the form of share buyback will likely become a pretty important part of our ongoing strategy.

Manav Gupta, Analyst, UBS: Thank you. The follow-up here is when we look at the RVO, and if you look actually closely, not many people do, unfortunately, is that you’re getting 50% win on imported feed stocks. That means domestic soybean oil could actually price at a significant premium to some of these imported RD feed stocks. Would that lead to a situation where you would actually see your domestic soybean oil actually competing against low CI feed stocks and the premium that those low CI feed stocks get versus your domestic soybean shrink meaningfully and maybe go even the other way? If you could comment on that.

John Neppl, Chief Financial Officer, Bunge: Yeah. I think it’s a little early to tell, but I don’t think that’s out of the realm of possibility. Certainly, the rules we’re putting in place around RDO and green generation were meant to incent domestic production and use of domestic feed stocks. So soybean oil obviously being a key part of that and being something that can be supplied in a large quantity, we think is going to give it, as I mentioned earlier, a bit of an advantage, particularly over imported feed stocks. We’ll see how the market plays out. The market always works, and it finds a balance. We like the setup. We always do. We think we’ll be in a good position to take advantage of whatever the market.

Manav Gupta, Analyst, UBS: Thank you so much.

Drew, Conference Operator: This concludes our question and answer session. I would like to turn the conference back over to Greg Heckman for any closing remarks.

Greg Heckman, Chief Executive Officer, Bunge: I’d like to thank everybody for joining us today and for your interest and support of Bunge. As you can tell, this is a really key time in the life of the company. We’re really excited to bring these teams together and run this incredible global footprint that we’ve got to serve our customers. There’s no doubt whatever environment that we’re in, we’ve got the trust that our team is going to get our share. Thank you much and have a great day.

Drew, Conference Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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