Steven Haynes

Steven Haynes asked for a directional guide by segment for 2026 Adjusted EBIT, working back from the midpoint of the overall guidance, to understand the split across Bunge's businesses.

Answer

CFO John Neppl provided a rough forecast for core segment EBIT: approximately 50% from Soy Processing and Refining, 25% from Soft Processing and Refining, 20% from Grain Merchandising and Milling, and the remaining 5% from Other Processing, Refining. He added that corporate and other expenses are expected to be around $120-$125 million negative per quarter.

Steven Haynes requested a directional guide by segment for 2026 Adjusted EBIT, acknowledging the complexity due to Viterra's full contribution this year compared to its absence in the first half of last year.

Answer

CFO John Neppl provided a rough breakdown of core segment EBIT: approximately 50% from Soy Processing & Refining, 25% from Soft Processing & Refining, 20% from Grain Merchandising & Milling, and 5% from Other Processing & Refining. He added that corporate and other expenses are expected to be a negative offset of $120-$125 million per quarter.

Steven Haynes from Morgan Stanley asked for an overview of the high-level supply, demand, and trade dynamics in Australia and how they are flowing through Viterra's legacy assets.

Answer

Gregory Heckman, Bunge's Chief Executive Officer, highlighted a large upcoming crop in Australia for wheat, barley, and rapeseed, which are important global crops. He noted potential for increased rapeseed exports due to trade tensions and competitive global markets for wheat and barley. John Knepel, Chief Financial Officer, added that Viterra brings a very strong position in Australia, which was previously a small export business for legacy Bunge, and they are pleased with the opportunity.

Steven Haynes asked for an overview of the high-level supply and demand trade dynamics in Australia and how they are flowing through Viterra's legacy assets.

Answer

CEO Gregory Heckman noted a significant crop of wheat, barley, and rapeseed coming off in Australia, which are important global crops for Bunge's expanded origination network. He mentioned potential for increased rapeseed exports due to Canada-China trade tensions and Australia's competitiveness in global wheat and barley markets. CFO John Knepel added that Viterra brought a very strong position in Australia, which was not a material business for legacy Bunge.

Steven Haynes of Morgan Stanley asked about unusual global trade flows, such as China importing soy meal, and requested a timeline for realizing commercial synergies from the Viterra integration.

Answer

CEO Greg Heckman characterized untraditional trade flows as the 'new norm' and a logical step for China's food security strategy. On synergies, he stated it was too early for new targets but that the team is focused on delivering more than promised, faster than promised. CFO John Neppl added that the immediate commercial focus has been establishing 'one voice to the market'.

Steven Haynes asked about the U.S. crush capacity landscape, whether Bunge might rationalize any assets, and how the industry will respond to new capacity additions.

Answer

CEO Greg Heckman stated that Bunge's portfolio has been strategically invested in to be highly competitive through all market cycles and that they plan to run their current assets. He noted that while Bunge is built for resilience, tougher market conditions may force shutdowns of less competitive, stand-alone plants that lack the benefits of an integrated global network like Bunge's.

Steven Haynes asked for more details on the 'constructive' regulatory discussions with China regarding the Viterra acquisition and whether recent U.S.-China trade tensions have affected the process.

Answer

CEO Gregory Heckman affirmed that discussions with Chinese authorities have been productive and are in the later stages. He emphasized that both Bunge and Viterra have long-standing, trusted relationships within the Chinese market that are vital for food security and transcend short-term geopolitical situations, ensuring continued collaboration.

Steven Haynes sought clarification on the outlook for the Refined and Specialty Oils segment to perform 'better than baseline' in 2025. He also asked about the market's ability to absorb new U.S. soy meal capacity.

Answer

CFO John Neppl explained that the refined oils business has shown resilience, particularly on the food side, putting it on a more solid footing than in the past. CEO Greg Heckman addressed the meal capacity question by emphasizing that meal is a global market and new supply comes online gradually, allowing the market to adjust. Neppl added that Bunge is actively expanding its own export capacity to handle increased volumes.

Stephen Haynes asked for an update on the 'still TBD' additional productivity beyond the $30 million restructuring, inquiring about its timeline and potential uplift relative to previously disclosed cost savings.

Answer

Guillermo Novo, Chair and CEO, explained that additional productivity comes from network optimization (e.g., consolidating overcapacity units, focusing on more productive units), investing in reactors for more throughput, and reducing cycle times. Some benefits are realized, others will leverage volume pickup. He noted that recent storms distracted engineers but they continue to work on defining and committing to these goals transparently throughout the year.

Stephen Haynes with Morgan Stanley asked for an update on the 'Execute' slide, specifically regarding the $30 million restructuring and the additional productivity that is currently TBD, inquiring about its timeline and potential uplift relative to disclosed cost savings.

Answer

Chair and CEO Guillermo Novo explained that the company is working through defining the additional productivity, which involves network optimization, consolidating volumes on more productive units, and investing in reactors for increased throughput and reduced cycle times. He noted that some benefits are already being realized, while others will leverage future volume pickup. He acknowledged that recent weather events have temporarily distracted engineers but committed to defining and being transparent about these goals throughout the year.

Steven Haynes of Morgan Stanley inquired about the Carbohydrate Solutions guide for the year, specifically how the sweetener contracting season progressed, the split of weakness between margin and volume, and if the guidance includes any explicit uplift from 45Z or 45Q tax credits, requesting quantification if possible.

Answer

Chair and CEO Juan Luciano confirmed the sweetener contracting season went well but with some volume softness impacting margins, though he couldn't quantify the exact split. Regarding 45Z, he estimated a potential benefit of approximately $100 million, cautioning that this is an approximation due to many variables like carbon intensity, prevailing wage, sequestration amounts, production volumes, and industry pricing reactions, pending final guidance.

Steven Haynes of Morgan Stanley inquired about the Carbohydrate Solutions segment's 2026 guide, specifically the sweetener contracting season's outcome, the balance between margin and volume weakness, and any explicit uplift included from 45Z or 45Q tax credits.

Answer

Chair and CEO Juan Luciano noted that the sweetener contract season went well but with some volume softness impacting margins, making it softer than previous negotiations. He estimated a potential benefit of approximately $100 million from 45Z, while cautioning that many variables and final guidance are still pending.

Steven Haynes requested a more precise outlook for the fourth-quarter crush segment, specifically asking for clarification on expectations for stable margins and higher volumes quarter-over-quarter. He also asked for a comparison of the expected Q4 segment dollars against last year's approximately $200 million, to understand if it would be above, in line, or below that figure.

Answer

Monish Patolawala, EVP and CFO of ADM, stated that crush margins are expected to be lower on a year-over-year basis, despite being flat to slightly up from Q3. Consequently, he anticipates that crush segment dollars will also be impacted negatively year-over-year. He noted that mark-to-market derivative positions at quarter-end could shift reported figures between quarters but do not alter overall economics. Mr. Patolawala emphasized that pure execution margins in crush, including canola, are lower year-over-year, even with the team driving higher factory volumes, as evidenced by over 2% year-over-year production growth in Q3.

Steven Haynes asked for a more precise outlook on Q4 2025 crush, specifically how stable margins and potentially higher volumes quarter-over-quarter would translate into segment dollars compared to the approximately $200 million reported in the prior year's Q4.

Answer

Monish Patolawala, EVP and CFO, ADM, stated that crush margins in Q4 2025 are expected to be lower on a year-over-year basis, despite being flat to slightly up from Q3 2025. Consequently, crush segment dollars will also be lower year-over-year. He noted that this dynamic applies to both soybean and canola crush. He also reminded that mark-to-market derivative positions at quarter-end can impact reported numbers but not overall economics, while emphasizing the team's focus on driving higher volumes.

Steven Haynes of Morgan Stanley asked why renewable diesel margins have remained pressured while most of the value from the recent RVO proposal seems to have accrued to the crush complex, and if this dynamic is expected to persist.

Answer

CEO Juan Luciano attributed the current market dynamics to the uncertainty that will exist until final RVO numbers are confirmed. He cautioned against drawing long-term conclusions from this transitional period. He expects that once policy is clarified, production will accelerate to meet mandates, and historical patterns where higher oil value boosts crush margins will likely re-emerge. He emphasized ADM is preparing its plants to capture this opportunity.

Steven Haynes of Morgan Stanley asked why renewable diesel margins have remained pressured while most value has accrued to the crush complex since the RVO proposal, and whether this dynamic is expected to persist.

Answer

CEO Juan Luciano attributed the current market behavior to policy uncertainty, as the final RVO numbers and SRE treatments are not yet confirmed. He advised against drawing firm conclusions from the current dynamics, predicting that once policy is finalized, production will accelerate to meet mandates, which should cause RINs to react first. He stressed that ADM is preparing its assets for a large crop and higher crush rates in anticipation of this clarity.

Steven Haynes asked about Argentina, noting reports of historically slow farmer selling and questioning ADM's assumptions for the commercialization of that crop in its guidance.

Answer

CEO Juan Luciano, speaking as an Argentine farmer himself, confirmed that farmers withheld about 7 million tons of the old crop expecting a devaluation that did not occur. He now expects commercialization to accelerate as farmers move to take advantage of tax benefits before they expire in the next two months.

Steven Haynes inquired about the impact of Argentina's recent export tax revision on the soy crush complex and the potential evolution of this policy after its scheduled expiration in June.

Answer

CEO Juan Luciano stated that there has been no significant impact yet due to harvest timing, weather concerns, and complex implementation details. He highlighted a major change in financing terms that requires cash much earlier, which may deter participation. He noted it is very difficult to predict what policy will follow after the June expiration, as it depends on Argentina's broader macroeconomic situation.

Steven Haynes pointed out the significant increase in SG&A expense during the year and asked for the key drivers behind the ramp-up. He also inquired about the outlook for this cost line item given the company's new focus on cost controls.

Answer

EVP and CFO Monish Patolawala identified three main drivers for higher SG&A: increased litigation costs related to the material weakness, investments in digital transformation and ERP systems, and costs from recently closed M&A. He noted these were partially offset by lower incentive compensation. Going forward, he stated the company is using zero-based budgeting and focusing on synergies to manage these costs.

Steven Haynes, on behalf of Morgan Stanley, requested more detail on the 6% volume decline in the Americas, specifically the breakdown between base business performance and the impact from project exits.

Answer

CFO Melissa Schaeffer clarified that underlying on-site volumes were strong. The entire decline was attributed to two factors: the exited World Energy project and significantly lower helium demand. She noted that the core merchant business, excluding helium, actually saw improvements.

Steven Haynes, on behalf of Morgan Stanley, asked about the potential margin profile for the EMEA segment once volumes eventually recover, given its robust performance despite recent volume declines.

Answer

Sanjiv Lamba, Chief Executive Officer, attributed the strong EMEA margins to sustained efforts in pricing and productivity. He expressed confidence that as volumes improve, these margins will continue to expand, consistent with historical performance.

Steven Haynes from Morgan Stanley asked about the margin dynamics between geographies, questioning why EMEA margins have surpassed Americas' and whether Americas and APAC margins are expected to improve in 2025.

Answer

CEO Sanjiv Lamba explained that there is no structural impediment preventing any region from achieving the highest margins seen across the company. He noted that each segment contains businesses with 40%+ margins that serve as internal benchmarks. For 2025, he expects overall margin expansion of 20-50 basis points, driven by continued improvement in all segments, including the Americas and APAC.

Steven Haynes, on for Vincent Andrews, requested a bridge for the full-year EBITDA guidance, focusing on margin expectations at the segment level.

Answer

SVP and CFO Jamie Beggs stated that the guidance reflects current macro dynamics and an expectation for margin expansion of 25 to 75 basis points. This expansion is anticipated to come from operating leverage on higher sales, favorable mix from innovation, and productivity initiatives. She also noted an assumption of ~2% raw material inflation, which the company expects to offset with pricing.

Steven Haynes inquired about the higher-than-historical CapEx guidance of $750 million and its expected evolution in coming years.

Answer

CEO Tim Knavish clarified that this spending level is not the new normal and will return to the historical run rate of about 3% of sales. He explained the elevated 2024-2025 spending is for 'catch-up' from the COVID era and for specific organic growth projects, including new resin capacity in Mexico, aerospace expansion, and manufacturing consolidation in Europe as part of a cost-saving program.