Steven Haynes • Morgan Stanley

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.

Ask Fintool Equity Research AI

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.

Ask Fintool Equity Research AI

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.

Ask Fintool Equity Research AI

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.

Ask Fintool Equity Research AI

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.

Ask Fintool Equity Research AI

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.

Ask Fintool Equity Research AI

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'.

Ask Fintool Equity Research AI

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.

Ask Fintool Equity Research AI

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.

Ask Fintool Equity Research AI

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.

Ask Fintool Equity Research AI

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.

Ask Fintool Equity Research AI

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.

Ask Fintool Equity Research AI

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.

Ask Fintool Equity Research AI

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.

Ask Fintool Equity Research AI