Bunge Reports Third Quarter 2023 Results

Bunge Limited (NYSE:BG) today reported third quarter 2023 results

• Q3 GAAP diluted EPS of $2.47 vs. $2.49 in the prior year; $2.99 vs. $3.45 on an adjusted basis excluding certain gains/charges and mark-to-market timing differences
• In Agribusiness higher Processing results were more than offset by lower results in Merchandising
• Higher Refined and Specialty Oils results driven by strength in North America
• Significant progress on Viterra transaction and other growth initiatives
• Repurchased ~$600 million of common shares since Q2
• Increasing full-year adjusted EPS outlook to at least $12.50

• Overview

Greg Heckman, Bunge's Chief Executive Officer, commented, "Our team remained focused on executing our day-to-day business to deliver strong results for the third quarter. Our operating model enabled us to maximize our global footprint as we responded effectively to shifting market conditions. At the same time, we reached an important milestone in our strategic combination with Viterra, achieving overwhelming shareholder support for the transaction that we expect to accelerate Bunge's growth.

"We are also making good progress on other growth initiatives including enhancing our footprint, building relationships with our customers – farmers and end consumers, and strengthening our digital capabilities. I am proud of our team's work across value chains to successfully deliver on our mission of connecting farmers to consumers to deliver essential food, feed and fuel to the world."

• Financial Highlights

• Third Quarter Results

Core Segments

Agribusiness

Processing ⁽²⁾

Higher results in Brazil soy origination, Asia and North America were largely offset by lower results in Argentina. Results in Europe were in line with last year as improved performance in softseeds was offset by lower results in soy crush.

Merchandising ⁽²⁾

Higher results in our global corn value chain, which benefited from the large Brazilian safrinha corn crop, was more than offset by lower results in financial services and our global wheat value chain.

Refined & Specialty Oils

Refined & Specialty Oils Summary

Higher results in the quarter were primarily driven by North America. Higher results in Asia also contributed to the improved performance. Results in South America and Europe were lower.

Milling

Milling Summary

Higher results in the quarter were primarily driven by our South American operations reflecting improved margins due to the combination of lower wheat costs and more favorable channel mix. Results in the U.S. were also higher.

Corporate and Other

Corporate

Other

Corporate and Other Summary

The increase in Corporate expenses primarily reflected investments in growth initiatives as well as performance related compensation accruals. Lower Other results were primarily related to Bunge Ventures and our captive insurance program.

Non-core Segments

Sugar & Bioenergy

Sugar & Bioenergy Summary

Improved results were primarily driven by higher sugar prices, which more than offset lower ethanol prices.

Cash Flow

Cash provided by operations in the nine months ended September 30, 2023, was $1,860 million compared to cash used of $5,031 million in the same period last year. Adjusted for the proceeds from beneficial interest in securitized trade receivables, cash provided by operating activities was $1,945 million compared to $145 million in the prior year. The higher cash provided by operating activities, adjusted, was primarily driven by net changes in working capital and higher reported net income. Adjusted funds from operations (FFO) was $1,935 million compared to $1,788 million in the prior year.⁽⁴⁾

Income Taxes

For the nine months ended September 30, 2023, income tax expense was $495 million compared to $257 million in the prior year. The increase was primarily due to higher pre-tax income in 2023 as well as a change in geographic earnings mix.

• Outlook⁽⁵⁾

Taking into account year-to-date results and the current margin environment and forward curves, we now expect full-year 2023 adjusted EPS of at least $12.50 with potential upside depending on how market conditions evolve over the balance of the year.

In Agribusiness, full-year results are expected to be up from our prior outlook and in line with last year driven by higher results in Processing.

In Refined and Specialty Oils, full-year results are expected to be up from our prior outlook and last year's record performance.

In Milling, full-year results are expected to be in line with our prior outlook and significantly down from a strong prior year.

In Corporate and Other, results are expected to be down from our prior forecast and last year.

In Non-Core, full-year results in our sugar and bioenergy joint venture are expected to be up from our prior outlook and higher than last year.

Additionally, the Company expects the following for 2023: an adjusted annual effective tax rate in the range of 21% to 23%; net interest expense in the range of $340 to $360 million, which is down from our prior outlook of $350 to $370 million; capital expenditures in the range of $1.0 to $1.2 billion; and depreciation and amortization of approximately $425 million, which is up $10 million from our prior outlook.

• Conference Call and Webcast Details

Bunge Limited's management will host a conference call at 8:00 a.m. Eastern (7:00 a.m. Central) on Thursday, October 26, 2023 to discuss the Company's results.

Additionally, a slide presentation to accompany the discussion of results will be posted on www.bunge.com.

To access the webcast, go to "Events & Presentations" under "News & Events" in the "Investor Center" section of the company's website. Select "Q3 2023 Bunge Limited Conference Call" and follow the prompts. Please go to the website at least 15 minutes prior to the call to register and download any necessary audio software.

To listen to the call, please dial 1-844-735-3666. If you are located outside the United States or Canada, dial 1-412-317-5706. Please dial in five to 10 minutes before the scheduled start time. The call will also be webcast live at www.bunge.com.

A replay of the call will be available later in the day on October 26, 2023, continuing through November 26, 2023. To listen to it, please dial 1-877-344-7529 in the United States, 1-855-669-9658 in Canada, or 1-412-317-0088 in other locations. When prompted, enter confirmation code 8946006.

• About Bunge

At Bunge (NYSE:BG), our purpose is to connect farmers to consumers to deliver essential food, feed and fuel to the world. With more than two centuries of experience, unmatched global scale and deeply rooted relationships, we work to strengthen global food security, increase sustainability where we operate, and help communities prosper. As the world's leader in oilseed processing and a leading producer and supplier of specialty plant-based oils and fats, we value our partnerships with farmers to bring quality products from where they're grown to where they're consumed. At the same time, we collaborate with our customers to develop tailored and innovative solutions to meet evolving dietary needs and trends in every part of the world. Our Company is headquartered in St. Louis, Missouri, and we have almost 23,000 dedicated employees working across approximately 300 facilities located in more than 40 countries.

• Website Information

We routinely post important information for investors on our website, www.bunge.com, in the "Investors" section. We may use this website as a means of disclosing material, non-public information and for complying with our disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investors section of our website, in addition to following our press releases, U.S. Securities and Exchange Commission ("SEC") filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.

• Cautionary Statement Concerning Forward-Looking Statements

This press release contains both historical and forward-looking statements. All statements, other than statements of historical fact are, or may be deemed to be, forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act). These forward-looking statements are not based on historical facts, but rather reflect our current expectations and projections about our future results, performance, prospects and opportunities. We have tried to identify these forward-looking statements by using words including "may," "will," "should," "could," "expect," "anticipate," "believe," "plan," "intend," "estimate," "continue" and similar expressions. These forward-looking statements are subject to a number of risks, uncertainties, assumptions and other factors that could cause our actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. The following important factors, among others, could cause actual results to differ from these forward-looking statements: the impact on our employees, operations, and facilities from the war in Ukraine and the resulting economic and other sanctions imposed on Russia, including the impact on Bunge resulting from the continuation and/or escalation of the war and sanctions against Russia; the effects of weather conditions and the impact of crop and animal disease on our business; the impact of global and regional economic, agricultural, financial and commodities market, political, social and health conditions; changes in government policies and laws affecting our business, including agricultural and trade policies, financial markets regulation and environmental, tax and biofuels regulation; the impact of seasonality; the impact of government policies and regulations; the outcome of pending regulatory and legal proceedings; our ability to complete, integrate and benefit from acquisitions, divestitures, joint ventures and strategic alliances, including without limitation Bunge's proposed business combination with Viterra Limited, and the Company's ability to consummate the proposed redomestication that would change the Company's place of incorporation and residence from Bermuda to Switzerland; the impact of industry conditions, including fluctuations in supply, demand and prices for agricultural commodities and other raw materials and products that we sell and use in our business, fluctuations in energy and freight costs and competitive developments in our industries; the effectiveness of our capital allocation plans, funding needs and financing sources; the effectiveness of our risk management strategies; operational risks, including industrial accidents, natural disasters, pandemics or epidemics and cybersecurity incidents; changes in foreign exchange policy or rates; the impact of our dependence on third parties; our ability to attract and retain executive management and key personnel; and other factors affecting our business generally. The forward-looking statements included in this release are made only as of the date of this release, and except as otherwise required by federal securities law, we do not have any obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances.

You should refer to "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 24, 2023, "Risks Related to the Acquisition" and "Risks Related to the Redomestication" sections of the Company's definitive proxy statement filed with the SEC on August 7, 2023.

• Additional Financial Information

Certain gains and (charges), quarter-to-date

The following table provides a summary of certain gains and (charges) that may be of interest to investors, including a description of these items and their effect on Net income (loss) attributable to Bunge, Earnings per share diluted and Segment EBIT for the three month periods ended September 30, 2023 and 2022.

Core Segments

Agribusiness

EBIT for the three months ended September 30, 2023 included a mark-to-market gain of $10 million, in Cost of goods sold, related to inventory recovered from our Mykolaiv and other facilities in Ukraine. The circumstances allowing for recovery of these inventories did not exist and were unforeseeable when the inventory reserves were initially recorded in 2022 in conjunction with the Ukraine-Russia war.

EBIT for the three months ended September 30, 2022 included $21 million of impairment charges on the classification of our Russian oilseed and processing business as held-for-sale, recorded in Cost of goods sold.

Refined and Specialty Oils

EBIT for the three months ended September 30, 2022 included $55 million of impairment charges and employee severance expenses on the classification of our Russian oilseed and processing business as held-for-sale, recorded in Cost of goods sold.

Corporate and Other

Net income for the three months ended September 30, 2023 included $47 million of acquisition and integration costs (net of $2 million in tax benefits) related to the announced business combination agreement with Viterra. Specifically, the Company recorded $1 million of pre-tax charges within Interest expense for financing related fees, and $48 million of pre-tax charges within SG&A for other acquisition and integration related costs.

EBIT for the three months ended September 30, 2023 included a $20 million impairment charge, in Other Income (expense) - net, related to the full impairment of a long-term investment held in Other non-current assets.

EBIT for the three months ended September 30, 2022 included $11 million of impairment charges on the classification of our Russian oilseed and processing business as held-for-sale, recorded in Cost of goods sold.

Net income for the three months ended September 30, 2022 included $30 million tax expense on sale of our Mexico Wheat Milling business.

Certain gains and (charges), year-to-date

The following table provides a summary of certain gains and (charges) that may be of interest to investors, including a description of these items and their effect on Net income (loss) attributable to Bunge, Earnings per share diluted and Segment EBIT for the nine month periods ended September 30, 2023 and 2022.

Core Segments

Agribusiness

EBIT for the nine months ended September 30, 2023 included a mark-to-market gain of $29 million, in Cost of goods sold, related to inventory recovered from our Mykolaiv and other facilities in Ukraine. The circumstances allowing for recovery of these inventories did not exist and were unforeseeable when the inventory reserves were initially recorded in 2022 in conjunction with the Ukraine-Russia war.

EBIT for the nine months ended September 30, 2022 included $80 million of charges, recorded in Cost of goods sold, resulting from the Ukraine-Russia war, primarily related to losses associated with inventories physically located in occupied territories in Ukraine, or in difficult to access locations with high costs of recovery.

EBIT for the nine months ended September 30, 2022 included $21 million of impairment charges on the classification of our Russian oilseed and processing business as held-for-sale, recorded in Cost of goods sold.

Refined and Specialty Oils

EBIT for the nine months ended September 30, 2022 included $55 million of impairment charges and employee severance expenses on the classification of our Russian oilseed and processing business as held-for-sale, recorded in Cost of goods sold.

Corporate and Other

Net income for the nine months ended September 30, 2023 included $73 million of acquisition and integration costs (net of $5 million in tax benefits) related to the announced business combination agreement with Viterra. Specifically, the Company recorded $12 million of pre-tax charges within Interest expense for financing related fees, and $66 million of pre-tax charges within SG&A for other acquisition and integration related costs.

EBIT for the nine months ended September 30, 2023 included a $20 million impairment charge, in Other Income (expense) - net, related to the full impairment of a long-term investment held in Other non-current assets.

EBIT for the nine months ended September 30, 2023 included a $16 million impairment charge, in Income (loss) from affiliates, related to a minority investment in Australian Plant Proteins, a start-up manufacturer of novel protein ingredients.

EBIT for the nine months ended September 30, 2022 included a $29 million gain, at Bunge's then 70% share, related to the settlement of one of the Company's international defined benefit pension plans, recorded in Other income (expense) - net.

Net income for the nine months ended September 30, 2022 also included $39 million of expense (net of $8 million in tax benefits) related to the early redemption of the Company's 4.350% unsecured senior notes due March 15, 2024. In connection with the early redemption, the Company recorded a $47 million pre-tax charge within Interest expense, comprising a $31 million "make-whole" payment and a $16 million loss on the termination and de-designation of related interest rate hedges.

EBIT for the nine months ended September 30, 2022 included $11 million of impairment charges on the classification of our Russian oilseed and processing business as held-for-sale, recorded in Cost of goods sold.

Net income for the nine months ended September 30, 2022 included $30 million tax expense on sale of the Mexico Wheat Milling business.

• Consolidated Earnings Data (Unaudited)

• Condensed Consolidated Balance Sheets (Unaudited)

• Condensed Consolidated Statements of Cash Flows (Unaudited)

• Definition and Reconciliation of Non-GAAP Measures

This earnings release contains certain "non-GAAP financial measures" as defined in Regulation G of the Securities Exchange Act of 1934. Bunge has reconciled these non-GAAP financial measures to the most directly comparable U.S. GAAP measures below. These measures may not be comparable to similarly titled measures used by other companies.

Total Segment EBIT and Adjusted Total Segment EBIT

Bunge uses segment earnings before interest and tax ("Segment EBIT") to evaluate the operating performance of its individual segments. Segment EBIT excludes EBIT attributable to noncontrolling interests. Bunge also uses Core Segment EBIT, Non-Core Segment EBIT, Corporate and Other EBIT and Total Segment EBIT to evaluate the operating performance of Bunge's Core reportable segments, Non-Core reportable segments and Total reportable segments together with Corporate and Other. Core Segment EBIT is the aggregate of the earnings before interest and taxes of each of Bunge's Agribusiness, Refined and Specialty Oils, and Milling segments. Non-Core Segment EBIT is the earnings before interest and taxes of Bunge's Sugar & Bioenergy segment. Total Segment EBIT is the aggregate of the earnings before interest and taxes of Bunge's Core and Non-Core reportable segments, together with its Corporate and Other activities.

Adjusted Core Segment EBIT, Adjusted Non-Core Segment EBIT, Adjusted Corporate and Other EBIT and Adjusted Total Segment EBIT, are calculated by excluding temporary mark-to-market timing differences, as defined in note 3 below, and certain gains and (charges), as described in "Additional Financial Information" above, from Core Segment EBIT, Non-Core Segment EBIT, Corporate and Other EBIT, and Total Segment EBIT, respectively.

Core Segment EBIT, Non-Core Segment EBIT, Corporate and Other EBIT, Total Segment EBIT, Adjusted Core Segment EBIT, Adjusted Non-core Segment EBIT, Adjusted Corporate and Other EBIT and Adjusted Total Segment EBIT are non-GAAP financial measures and are not intended to replace Net income (loss) attributable to Bunge, the most directly comparable U.S. GAAP financial measure. Bunge's management believes these non-GAAP measures are a useful measure of its reportable segments' operating profitability, since the measures allow for an evaluation of segment performance without regard to their financing methods or capital structure. For this reason, operating performance measures such as these non-GAAP measures are widely used by analysts and investors in Bunge's industries. These non-GAAP measures are not a measure of consolidated operating results under U.S. GAAP and should not be considered as an alternative to Net income (loss) or any other measure of consolidated operating results under U.S. GAAP.

Net Income (loss) attributable to Bunge to Adjusted Net Income (loss) attributable to Bunge

Adjusted Net Income (loss) excludes temporary mark-to-market timing differences, as defined in note 3 below, and certain gains and (charges), as described in "Additional Financial Information" above, and is a non-GAAP financial measure. This measure is not a measure of Net income (loss) attributable to Bunge, the most directly comparable U.S. GAAP financial measure. It should not be considered as an alternative to Net Income (loss) attributable to Bunge, Net Income (loss), or any other measure of consolidated operating results under U.S. GAAP. Adjusted Net income (loss) is a useful measure of the Company's profitability.

We also have presented projected Adjusted Net income per common share for 2023. This information is provided only on a non-GAAP basis without reconciliation to projected Net Income per common share for 2023, the mostly directly comparable U.S. GAAP measure. The most directly comparable GAAP measure has not been provided due to the inability to quantify certain amounts necessary for such reconciliation, including but not limited to potentially significant future market price movements over the remainder of the year.

Below is a reconciliation of Net income attributable to Bunge, to Total Segment EBIT, and Adjusted Total Segment EBIT: