Bunge Global Q1 2025 Earnings Report

Bunge Global EPS Results

• Actual EPS: $1.81
• Consensus EPS: $1.27
• Beat/Miss: Beat by +$0.54
• One Year Ago EPS: $3.04

Bunge Global Revenue Results

• Actual Revenue: $11.64 billion
• Expected Revenue: $13.18 billion
• Beat/Miss: Missed by -$1.54 billion
• YoY Revenue Growth: -13.20%

Bunge Global Announcement Details

• Quarter: Q1 2025
• Date: 5/7/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, May 7, 2025
• Conference Call Time: 8:00AM ET

Bunge Global (NYSE:BG) (NYSE: BG) is a leading agribusiness and food company with roots dating back to 1818. Originally founded in Amsterdam by Johann Peter August Bunge, the firm established itself in North and South America before evolving into a global player headquartered in White Plains, New York. Over two centuries, Bunge has built an extensive network of grain elevators, oilseed processing plants and port facilities, positioning itself as a vital link in the worldwide food supply chain.

The company’s core operations span four primary segments: agribusiness, edible oils and milling, sugar and bioenergy. In agribusiness, Bunge sources, stores, transports and processes oilseeds and grains, supplying ingredients for animal nutrition, industrial applications and food production. Its edible oils and milling segment produces refined vegetable oils, shortenings and margarines for retail, foodservice and industrial customers. Within sugar and bioenergy, Bunge manufactures and markets raw and refined sugar, ethanol and other biofuels, utilizing state-of-the-art processing technologies.

Bunge’s global footprint extends across more than 40 countries, with a particularly strong presence in North and South America, Europe and Asia Pacific. The company leverages an integrated network of assets—including deepwater port terminals, rail and barge transportation—and strategic partnerships to deliver agricultural commodities to markets from Brazil’s soybean heartland to Asia’s growing food hubs. This geographic diversity helps Bunge manage supply chain risks and capture emerging market opportunities.

Under the leadership of President and Chief Executive Officer Greg Heckman, Bunge continues to invest in digital innovation, sustainability initiatives and operational efficiency. The executive team emphasizes traceability in sourcing, reduced greenhouse-gas emissions and enhanced supply-chain transparency. As global demand for food, feed and renewable energy grows, Bunge aims to maintain its position as a trusted partner for farmers, processors and consumers worldwide.

Bunge Global Q1 2025 Earnings Call Transcript

Key Takeaways

• First-quarter results exceeded expectations with adjusted EPS of $1.81 (versus a $1.68 reported) and $400 million of adjusted segment EBIT, aided by farmers and customers pulling activity forward amid tariff and regulatory uncertainty.
• Bunge reaffirmed its full-year 2025 adjusted EPS guidance of approximately $7.75 per share, underscoring confidence in its global platform and execution capabilities.
• The planned combination with Viterra remains on track, with management engaged in constructive regulatory discussions and expecting imminent closing once approvals are received.
• Bunge is sharpening its portfolio by agreeing to sell its European margins & spreads and North American corn milling businesses, reallocating resources to its core global value chains.
• A new joint venture with Repsol will integrate intermediate novel crop oils into European renewable fuels production, advancing Bunge’s low-carbon strategy and feedstock optionality.

Presentation

[Operator]

Good day, and welcome to the Banking S. A. First Quarter twenty twenty five Earnings Release and Conference Call. Today, all participants will be in listen only mode. After today's presentation, there will be an opportunity to ask your questions.

[Operator]

Please note that today's event is being recorded. I would now like to turn the conference over to Ruth Ann Wisener. Please go ahead, madam.

[Ruth Ann Wisener, Vice President, Investor Relations at Bunge]

Thank you, operator, and thank you for joining us this morning for our first 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 on our website at bunge.com under Events and Presentations. Reconciliations of our non GAAP measures to the most directly comparable GAAP financial measure are posted on our website as well. I'd like to direct you to slide two and 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.

[Ruth Ann Wisener, Vice President, Investor Relations at Bunge]

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 Heckmann, Fonny's Chief Executive Officer and John Knepple, Chief Financial Officer. I'll now turn the call over to Greg.

[Greg Heckman, CEO & Director at Bunge]

Thank you, Ruth Ann, and good morning, everyone. I want to start by thanking our team for their hard work and adaptability in what has already been a highly dynamic 2025. Their continued focus and great execution delivered a strong start to the year and demonstrated once again that we can navigate market environments, agility and speed, harnessing a truly global platform and strength in our core markets. We continue to believe in the strategic merits of our planned combination with Vitera and expect to close the transaction in the near term. While the timing of regulatory approvals has not been what we anticipated, we've engaged in constructive conversations with the relevant authorities, prepared to close in very short order once received.

[Greg Heckman, CEO & Director at Bunge]

Recently chose to execute our rights to terminate the definitive share purchase agreement with CJ Selecta pursuant to its terms. However, soy protein concentrate for feed remains an attractive market with promising growth prospects and nicely complements our soy origination crushing capabilities in Brazil. At the same time, we've made great progress in other key areas, further sharpening our portfolio, strengthening our business and positioning Bunge for the future. Recently announced the sale of our European margins and spreads business and our North American corn milling business. Both of these transactions allow us to further align around our global value chains.

[Greg Heckman, CEO & Director at Bunge]

We also closed our previously announced partnership with Repsol and announced a key milestone with the incorporation of intermediate novel crops in the production of renewable fuels in Europe. This alliance furthers our long term strategy to create alternative paths towards meeting our customers' demand, lower carbon agricultural and oil supply chains. Shifting to operating results. First quarter exceeded our expectations, driven in part by some pull forward of activity from Q2 into Q1. Later in the quarter, shifts in trade dynamics, including tariff and regulatory uncertainty, prompted some farmers and consumers to act ahead of potential changes.

[Greg Heckman, CEO & Director at Bunge]

Looking ahead, we're reaffirming our full year 2025 adjusted EPS guidance of approximately $7.75 and remain confident in our ability to continue to execute despite the current market environment. As we mentioned last quarter, we expect to provide an outlook for the combined company once we've closed the Viterra transaction. With that, I'll turn it over to John for a deeper look at our financials and outlook. John?

[John Neppl, Chief Financial Officer at Bunge]

Thanks, Greg, and good morning, everyone. Let's turn to the earnings highlights on Slide five. As Greg mentioned, the first quarter exceeded our expectations. As tariff and regulatory uncertainty increased later in the quarter, some farmers and customers moved ahead of potential changes, which slowed earnings from Q2 into Q1.

[John Neppl, Chief Financial Officer at Bunge]

Our reported first quarter earnings per share was $1.48 compared to $1.68 in the first quarter of twenty twenty four. Reported results included an unfavorable mark to market timing difference of $08 per share to negative impact of $0.25 per share, notable items related to the transaction integration costs associated with Viterra. Adjusted EPS was $1.81 in the first quarter versus $3.04 in the prior year. Adjusted segment earnings before interest and taxes or EBIT was $4.00 $6,000,000 in the quarter versus $719,000,000 last year. In processing, higher results in the Brazil, Europe and Asia soy crush value chains more than offset by lower results in North America, Argentina and European soft seeds.

[John Neppl, Chief Financial Officer at Bunge]

Merchandising improved performance in Global Grains Financial Services business more than offset by lower results in ocean freight. With the exception of Asia, refined and specialty oils results were down in all regions, reflecting more balanced global supply and demand environment, driven in part by the uncertainty in U. S. Biofuel policies. In milling, slightly higher results in North America were more than offset by lower results in South America.

[John Neppl, Chief Financial Officer at Bunge]

Fueling margins were pressured by a more competitive pricing environment. In Corporate and Other, the decrease in corporate expenses was primarily driven by lower performance based compensation. Prior year other results include $24,000,000 from the Sugar and Bioenergy joint venture that we divested in the fourth quarter of last year. Net interest expense of $45,000,000 was down in the quarter compared to last year due to increased capitalized interest, higher interest income on investments and interest bearing instruments and interest received on Brazilian tax refunds. Decrease in income tax expense for the quarter was primarily due to lower pretax income in 2025 and prior year unfavorable adjustments related to foreign currency fluctuations in South America.

[John Neppl, Chief Financial Officer at Bunge]

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 twelve months. Throughout this period, our team has excelled in navigating the complexities, dynamic markets, while simultaneously executing various internal initiatives. Recent trend indicates a more balanced supply and demand environment and the impact of trade and biofuel uncertainty, translating into less volatility and lower earnings. Slide seven details our capital allocation. In the first quarter, we generated $392,000,000 of adjusted funds from operations.

[John Neppl, Chief Financial Officer at Bunge]

After allocating $54,000,000 to sustaining CapEx, which includes maintenance, environmental health and safety, we had $338,000,000 of discretionary cash flow available. Of this amount, we paid $91,000,000 in dividends, adjusted $256,000,000 in growth in productivity related CapEx. We also received $3.00 $6,000,000 of cash proceeds related to the sale of an interest in our soy crush footprint in Spain to Repsol as part of our newly formed joint venture and a final payment for the sale of our interest in the Sugar and Bioenergy joint venture. This resulted in approximately $300,000,000 of retained cash flow. Moving to Slide eight.

[John Neppl, Chief Financial Officer at Bunge]

At quarter end, readily marketable inventories or RMI exceeded our net debt by approximately $3,000,000,000 Adjusted leverage ratio, which reflects our adjusted net debt to adjusted EBITDA, was 0.6 times at the end of the quarter. Slide nine highlights our liquidity position. At quarter end, we had committed credit facilities of approximately $8,700,000,000 all of which were unused, providing ample liquidity to maintain ongoing capital needs. In addition, we had a cash balance of approximately $3,200,000,000 accumulated in large part from The U. S.

[John Neppl, Chief Financial Officer at Bunge]

Public debt offering that we closed last September in support of the Viterra transaction. There were no amounts outstanding on our $2,000,000,000 commercial paper. Please turn to Slide 10. The trailing twelve months adjusted ROIC was 9.4% and ROIC was 8.2%. Adjusting for construction in progress on our large multiyear projects not yet operating and the excess cash on our balance sheet from the Vitera closing, adjusted ROIC would increase by 1.5 percentage points and ROIC by approximately one percentage point.

[John Neppl, Chief Financial Officer at Bunge]

Returns have declined recent highs, being above our adjusted weighted average cost of capital of 7.7%. Moving to slide 11. In the trailing twelve months, we produced discretionary cash flow of approximately $1,200,000,000 and a cash flow yield of 10.2% compared to our cost of equity of 8.2%. Please turn to Slide 12 and our 2025 outlook. As Greg mentioned in his remarks, taking into account Q1 results, current margin and macro environment and forward curves, we continue to expect full year 2025 adjusted EPS of approximately $7.75 This forecast excludes the impact of announced acquisitions and divestitures that are expected to close during the year.

[John Neppl, Chief Financial Officer at Bunge]

Agribusiness full year results are forecasted to be slightly lower than our previous outlook and down from last year, primarily due to lower results in processing. Fine and Specialty Oils, full year results are expected to be similar to our previous outlook and down from the prior year, primarily driven by a more balanced supply and demand environment in North America. Milling full year previous outlook and up from last year. In Corporate and Other, full year results are expected to be more favorable than our previous outlook and the prior year. Additionally, the company expects the following for 2025: adjusted annual effective tax rate in the range of 21% to 25% net interest expense in the range of $220,000,000 to $250,000,000 which is down from our previous expected range of $250,000,000 to $280,000,000 capital expenditures in the range of 1,500,000,000.0 to $1,700,000,000 and depreciation and amortization of approximately $490,000,000 With that, I'll turn things back over to Greg for some closing comments.

[Greg Heckman, CEO & Director at Bunge]

Thanks, John.

[Greg Heckman, CEO & Director at Bunge]

Before turning to Q and A, I want to offer a few closing thoughts. In today's uncertain global environment, we can be certain of the strength of our team, global footprint and our operating model. Our purpose of connecting farmers to consumers to deliver essential food, feed and fuel is something the world depends on regardless of external circumstances. For the last few years, our team has consistently risen to the challenge, navigating an ever changing world exceeding expectations in the face of a global pandemic, trade wars, geopolitical uncertainty. Confident that the same focus, discipline and ability to execute continue to drive our success.

[Greg Heckman, CEO & Director at Bunge]

Our business is built on a resilient global infrastructure that ensures an efficient supply of staple crops and food and feed products that has proven its ability to withstand volatility. We have the right systems and strategies in place to manage risk, adapt to external challenges and remain focused on what truly matters. Plan combination with Viterra will only enhance our diversification across assets, geographies and crops, providing us with more optionality to help address the world's food security needs. Its core business is resilient. Track record proves this. I have no doubt that we'll continue to deliver value for customers at both ends of the value chain. With that, let's turn to Q and A.

[Operator]

The first question from the phone comes from Salvator Tiano with Bank of America. Please go ahead.

[Salvator Tiano, Equity Research Analyst at Bank of America]

Yes. Thank you very much. Firstly, I want to ask to follow-up a little bit on acquisitions. So with Vitera, you make it very clear that it seems it's the approval is very, very imminent. But obviously, seems to be the holdup here and there's always limited visibility in what they do.

[Salvator Tiano, Equity Research Analyst at Bank of America]

So how confident are you that actually they will approve the transaction soon? And if actually there is a chance that this may not happen, what is your backup plan there? And also on CJ Selecta, can you provide a little bit more commentary on why the transaction didn't go through? And it seems to indicate that you chose to terminate it, but at least by our mouth, it was a pretty nice, very accretive transaction. So why would you make this why did you make this decision?

[Greg Heckman, CEO & Director at Bunge]

Let me start with Vitera. Of course, one, look, the strategic merits of this transaction remain in place, and it accelerates everything that we're doing strategically. We've had very constructive interaction with the authorities as we've submitted additional information as needed. They've done a really excellent job engaging with all the parties and advancing the process. So we're confident that traction is going to be improved.

[Greg Heckman, CEO & Director at Bunge]

When you look at the merits, it's very, very clear. We are we're purpose built to create a resilient supply chain, and that's to serve China and the rest of the key demand markets globally. So in times of some of the extreme market disruptions that we've seen and one like we're experiencing now, the reliability that comes from a company like ourselves that's operating every major origin is even more important. So timing, we don't know, but the process moves and we feel very good about the ultimate destination. And then as far as CJ, look, we went through the long stop date.

[Greg Heckman, CEO & Director at Bunge]

We passed that And we just kind of looked at the circumstances of currently where things were at with the business, and it just made sense at this point to terminate the transaction. Now as I said in the comments, look, the market for CSPC on the feed market, that continues to be attractive, and it really fits well with our Brazilian business. We'll continue to look for the right opportunity to expand in that market.

[John Neppl, Chief Financial Officer at Bunge]

Maybe just to clarify, Salvator, on CJ. Going through the end date was a result of not having all the regulatory approvals. And at that point, we could have chose to extend it. We felt it was appropriate. But as Greg mentioned, we just felt at that time the right thing to do is terminate the agreement.

[Salvator Tiano, Equity Research Analyst at Bank of America]

Great. Thank you. And I also want to ask about your processing business and specifically, can you break down your margins for U. S. Soy and Canadian canola versus the margins you had in the rest of the world?

[Salvator Tiano, Equity Research Analyst at Bank of America]

How were they how did they trend Q1 versus Q4? And also, how are they on an absolute basis? Because I guess U. S. Soybean historically has been much stronger performer, but may not necessarily be the case in Q1.

[Greg Heckman, CEO & Director at Bunge]

Yes. Look, let me, I guess, hit the high spots here quickly. We definitely saw if you look the fact on soy that we're holding the year, you've kind of got to look down into the quarter. So Q1 was better. That caused the overperformance.

[Greg Heckman, CEO & Director at Bunge]

But unfortunately, things have gotten softer here on the curves as we've gone into Q2, and some of that definitely is on open capacity. So crush will be and soy will be lower in Q2. And then with the crop coming off, the curves are telling us should be better again in Q4. The net of that is the year will be flat, but as often happens in this business, when you've got two crops a year coming off and you look at the twelve month cycle, the timing can move around a little bit. And really in soy, the spot crush margins are pretty good or better everywhere.

[Greg Heckman, CEO & Director at Bunge]

And then the outlook is definitely tougher in the curve except for North America where we see it getting better with crop. Now in the soft seeds, North America, canola in Canada, much the same. We had a tighter crop there and the curves get better as we look out to set these for new crop. And then in soft seeds in Europe and the Black Sea, both sunseed and rapeseed production was tighter last year. So we got slow farmer selling.

[Greg Heckman, CEO & Director at Bunge]

And then of course with soybean oil being very competitive globally, that has been tough on softseed crush margins. So again, we look to new crop in the CEPTIs period for that to improve.

[John Neppl, Chief Financial Officer at Bunge]

And maybe to put a finer point on that. Looking at Q1 versus a year ago, U. S, the soy crush margins weren't dramatically different than they were a year ago for Q1, a little bit lower. The big impact in North America was softseed margins were much lower in Q1 versus last year.

[John Neppl, Chief Financial Officer at Bunge]

And then in terms of soy kind of globally, as Greg mentioned, stronger probably strongest in Europe in Q1. And then U. S. Is number two. And then we had really weak margins in Argentina in Q1.

[John Neppl, Chief Financial Officer at Bunge]

And of course, that we're seeing the improvement there in the spot in Q2 given farmer activity in Argentina. So we're running harder down there now.

[Salvator Tiano, Equity Research Analyst at Bank of America]

Perfect. Thank you very much.

[Operator]

The next question comes from Tom Palmer with Citi. Please go ahead.

[Tom Palmer, Vice President & Senior Equity Research Analyst at Citi]

Hi, and thanks for the question. Maybe just to follow-up on the last question on cadence of earnings. You did indicate the pull forward and kind of the 1Q, 2Q dynamics and then how maybe especially North America ramps up a bit to close out the year. But you provided some specificity last quarter talking about 40% of annual earnings coming in the first half of the year. I guess just any updated thoughts on thinking about the cadence of earnings as we move through this year, just given the 1Q dynamics?

[John Neppl, Chief Financial Officer at Bunge]

Tom, I think this is John. The look at the year of forty-sixty really hasn't changed first half, second half. What we saw was really a flip between Q1 and Q2 instead of forty-sixty, it came out more 60 it looks to be more sixty-forty. So we pulled earnings forward from Q2 and expect a little bit of softness in Q2 from our prior forecast. So about half that overperformance in Q1 was pulled forward in Q2.

[John Neppl, Chief Financial Officer at Bunge]

The other half we're seeing we had some other things go well in Q1, but we see a little bit of softness in Q2. So we're looking at 60%, maybe 62%, thirty eight if I wanted to put a really fine point on it from Q1 to Q2, but the broader first half, second half is the same outlook as we had last year last quarter.

[Tom Palmer, Vice President & Senior Equity Research Analyst at Citi]

All right. Thank you. And then just on the assumptions embedded in guidance, you did note kind of new crop better crush margins late in the year as is normal. I wondered about kind of what you're embedding for other items such as U. S.

[Tom Palmer, Vice President & Senior Equity Research Analyst at Citi]

Biofuels policy and potential clarity on the RVO for next year? And then just any what you're embedding for U. S. Kind of China trade relations and how that might impact you as the year progresses? Thanks.

[Greg Heckman, CEO & Director at Bunge]

Yes. So just as a reminder, we don't have any M and A or share repurchases factored in, and we only assume what's kind of we can see in the current tariff situation and the forward curves. So to the point, what the market believes about RVO, in kind of the current trade tensions is reflected in the curves. It's in our forecast and outlook. We're not making any calls that are different from what the market is telling us.

[Tom Palmer, Vice President & Senior Equity Research Analyst at Citi]

Thank you for that.

[John Neppl, Chief Financial Officer at Bunge]

Thanks, Tom.

[Greg Heckman, CEO & Director at Bunge]

Thank you.

[Operator]

The next question comes from Manav Gupta with UBS. Please go ahead.

[Manav Gupta, Executive Director at UBS Group]

Good morning. I just wanted to focus a little bit on this development with Repsol. Looks like you're moving forward with it. Help us understand the benefits and why does it make strategic sense to move ahead with Repsol on this kind of a JV?

[Greg Heckman, CEO & Director at Bunge]

Yes. We're really excited. Repsol is a great partner. They're making investments in their infrastructure as they're moving to lower carbon fuels. And we're excited to form the joint venture to be able to help that not only with the soy processing assets that went into the JV, but in the origination of the lower carbon intensity feedstocks.

[Greg Heckman, CEO & Director at Bunge]

And of course, some of that is the announcement we made at the same time to bring novel crops to be part of that solution of lower carbon intensity oils to then go into their global diesel and SAF process. So we're at the front end of that, but we're excited. We really want to be the partner of choice in every space that we operate, and that includes working with the fuel industries as they look to put lower carbon fuels into their portfolios.

[John Neppl, Chief Financial Officer at Bunge]

And Manas, I might just add that while there's a lot of discussion around uncertainty in U. S. Biofuel policy, there's a lot more certainty than that in Europe and other places. So it's Europe seems very committed to it and Repsol is part of that commitment. And we wanted to be, as Greg pointed out, partnered with someone that we think is in a great position to take advantage of the growing biofuels opportunity here.

[Manav Gupta, Executive Director at UBS Group]

Perfect. My quick follow-up is, I understand it's not in your guidance, but there's a lot of chatter that in the next two or three weeks, you could get a much higher revised RVO with a stronger biomass diesel volume. So in the event you do get a higher RVO, which is significantly better, how is Bunge going to benefit from it probably in the second half or in 2026, if you could provide some thoughts on it?

[Greg Heckman, CEO & Director at Bunge]

Yes. That would definitely strengthen the oil leg of the crush here in North America and North America as an exporter of oil, of course, that would help the oil leg globally. So that would be good for crush margins.

[John Neppl, Chief Financial Officer at Bunge]

And I would we're not very covered we're not very locked for Q3 and Q4. So to the extent the second half margin environment improves, we should be well positioned to take advantage of that. And right now, energy customers are relatively low percentage of our refined oil volume. So any demand there will be certainly good for our outlook.

[Manav Gupta, Executive Director at UBS Group]

Thank you so much.

[Operator]

The next question comes from Heather Jones Jones with Heather Jones Research. Please go ahead.

[Heather Jones, Founder at Heather Jones Research]

Thanks for the question.

[John Neppl, Chief Financial Officer at Bunge]

Good morning, Heather.

[Heather Jones, Founder at Heather Jones Research]

I wanted to stick with the RVO. So I have recently, and this was from a conference as well as other things. Recently, I've heard from some industry watchers that the 5,250,000,000 gallon D4 headline number that's been in media reports, etcetera, that it may not be that high, that it may be more in the mid-4s with the backfill opportunity taking you into the 5s. So just wanted to get your thoughts on that. And a follow-up to that is, do you think that would be enough to make the domestic market much tighter given the limitations that we have on feedstock imports and biofuel imports this year that we didn't have previously?

[Greg Heckman, CEO & Director at Bunge]

Yes. Demand is good, but what I'd like to start with is we are really proud to be part of that first of a kind coalition where we've got farmers, large segment of the petroleum refiners and the crushing industry, right, driving to consensus and then advocating for an RVO that's aligned with what The U. S. Can produce. And when I say The U.

[Greg Heckman, CEO & Director at Bunge]

S, I mean, think about the investments that have been made, right, that are already in place to help The U. S. Achieve energy security and dominance and provide a lot of support for rural communities. The farmers have invested, right? They've invested in the land and the machinery, the know how around the inputs and the crop production.

[Greg Heckman, CEO & Director at Bunge]

The oil companies have invested in converting their plants to biofuels. The crush industry, we've added production capacity to provide the inputs. So the infrastructure is in place in every part of supply chain. We can serve the demand right now. This is unused capacity.

[Greg Heckman, CEO & Director at Bunge]

So this is not aspirational. And that's been the message. So we remain, I think, and optimistic that we'll get to the right number. And if it doesn't, right off the bat, the coalition is going to continue to advocate, continue to explain the facts, the impact that the RVO has on rural America and what it really does to drive value at the farm gate and all the way through the local economies by adding that domestic demand.

[Heather Jones, Founder at Heather Jones Research]

Okay. Thank you for that. And then I wanted to move on to the tariff situation and clearly, it's a very dynamic environment. And who knows, it might be very different by next week. But as it sits right now with the tariffs in place with China and the impacts on U.

[Heather Jones, Founder at Heather Jones Research]

S. Beans, etcetera, How are you thinking about how that impacts Brazilian crush margins? And could that potentially if those dynamics don't shift quickly, could that potentially affect slow down the build out of crush down there?

[Greg Heckman, CEO & Director at Bunge]

Yes. Look, to start with, the policy is going to work itself out. We like policies that good for farmers because that's good for the entire ag value chain. And the markets do work and they send the right signal to farmers and they send the right signal to industry. One of the things we like about our footprint is that whether we're going to crush more in The U.

[Greg Heckman, CEO & Director at Bunge]

S. Domestically if exports are lower. The same would be offset in Brazil if exports are higher then we'll crush less. So we're going to flex our system not only by regions globally, but within those regions between crush and export and other domestic demand. So I think that's what we love about our balanced footprint.

[John Neppl, Chief Financial Officer at Bunge]

Heather, when you think about it, there are three things we do in any origin: storage, export and processing. And so depending on what the global markets are telling us for many of those origins, we can either choose to store it and ultimately process it or export it, whatever the market is telling us to do. So to Greg's point, we have ultimately good flexibility around whatever the tariff situation ends up being.

[Heather Jones, Founder at Heather Jones Research]

Awesome. Thank you so much.

[John Neppl, Chief Financial Officer at Bunge]

Thank you.

[Operator]

The next question comes from Puran Sharma with Stephens. Please go ahead.

[Pooran Sharma, Managing Director at Stephens Inc]

Thanks for the questions. Just wanted to ask about South America. Do you expect accelerated farmer selling out of South America in the coming months out of Argentina in the coming months? What would this mean for kind of global crush margins and your footprint?

[Greg Heckman, CEO & Director at Bunge]

Yes. In Argentina, I think we talked about pretty slow farmer selling there in Q1. We've seen a recent pickup in the farmer selling, and that's been better for margins there in Argentina, and then we've adjusted the global footprint a little bit. You've got a temporary lower export tax window that closes late June. You've got better weather, which is telling the farmers what their beliefs are and they've lifted some of the capital controls.

[Greg Heckman, CEO & Director at Bunge]

So that's driving the farmer selling today. We'll see how long the duration of that goes and how that will affect. And then in Brazil, the driver, another record soybean crop. There's no take or pay this year, which should help improve the value chain performance versus 2024. And then if you think about it, we've got a big total corn crop coming behind that.

[Greg Heckman, CEO & Director at Bunge]

So from the farmer selling of beans, historically, the farmer has been marketed more regularly to get ready for the safrinha harvest to free up the bin space and to deal with some of any of the logistical timing and coordination that needs to happen.

[Pooran Sharma, Managing Director at Stephens Inc]

Appreciate that detail. My follow-up was actually going to be on the take or pay. So I appreciate you getting ahead of that. I guess wanted to maybe hone in on some of the divestitures you've announced. With the divestiture of corn milling, just wanted to, a, ask, does this just leave you with wheat milling in your milling business?

[Pooran Sharma, Managing Director at Stephens Inc]

Is it just wheat milling now? And then how should we think about that business when it comes to kind of your core operations as you look ahead?

[Greg Heckman, CEO & Director at Bunge]

Yes, correct. We've got a real nice South American wheat milling business there in Brazil. Viterra also has South some Brazilian wheat milling. Those footprints fit together very nicely to serve our customers there. We like our position there in Brazil in the wheat milling business because not only the local crop, but we feed that from our Argentine wheat value chain as well as other global wheat markets as they make sense to import into Brazil, which happens quite often.

[Greg Heckman, CEO & Director at Bunge]

So that business is a good fit, we think we're in a very competitive position for the long term to serve our customers.

[John Neppl, Chief Financial Officer at Bunge]

Yes. And just to clarify the first part of your question, our South American wheat milling will be the only thing left from a milling perspective once we close the transaction.

[Pooran Sharma, Managing Director at Stephens Inc]

Great. Appreciate the details.

[Operator]

The next question comes from the line of Derrick Whitefield with Texas Capital. Please go ahead.

[Derrick Whitfield, Managing Director at Texas Capital]

Good morning all and thanks for taking my questions. I wanted to ask a follow-up on Repsol with my first. Could you speak to the amount of Camelina and safflower that could be processed as feedstock for their biorefinery or the mix that they're solving for through this partnership?

[Greg Heckman, CEO & Director at Bunge]

It's probably too early to give the exact numbers on that. But basically, what we want to do with our energy companies are give them the different choices of the lower CI feedstocks and having multiple novel crops and even used cooking oil and the other things that we're sourcing in our portfolio, we can then give them the choice on what works in their machinery, for cost, the quality, and the carbon intensity that works for them. So what we want to be able to provide is that optionality of feedstocks. And even in these novel crops, then it becomes building the programs and continuing to build the volumes. And that's like winter canola in The U.

[Greg Heckman, CEO & Director at Bunge]

S. We got started last year, and then we've seen great uptake by the farmers. We've got a lot more acres out there. And so we'll build these programs in partnership with the demand and with the growers.

[John Neppl, Chief Financial Officer at Bunge]

Yes. And maybe just one thing, Derek. Look, we're not targeting any specific mix of inputs. It's going to be whatever the market tells us is the most economic. It could be, as Greg mentioned, mix of novel seeds, soy oil soybean oil, YUCO, all those things are, as Greg mentioned, are part of the portfolio.

[John Neppl, Chief Financial Officer at Bunge]

And ultimately, the economics are going to drive what the most logical combination of inputs is.

[Derrick Whitfield, Managing Director at Texas Capital]

Great. That makes sense. And for my follow-up, I wanted to stay on biofuels. Do you expect a more favorable assessment for SBL and winter canola based on industry feedback and your interaction with the administration on 45Z? Seems to be quite a bit of energy around the inclusion of CSA practices, for seed oils.

[Greg Heckman, CEO & Director at Bunge]

We're optimistic and we're engaged in that and trying to bring the facts forward and bringing the economics forward and to do what's good for farmers as well as the entire value chain there.

[Derrick Whitfield, Managing Director at Texas Capital]

That's great. Thanks for your time.

[Operator]

The next question comes from Stephen Hayne with Morgan Stanley. Please go ahead.

[Steven Haynes, Vice President, Equity Research at Morgan Stanley]

Hey, good morning and thanks for taking my question. Just on U. S. Industry crush capacity, I think one of your peers has announced the shutdown of the plant. And so really maybe just kind of two questions.

[Steven Haynes, Vice President, Equity Research at Morgan Stanley]

It doesn't sound like it, but is there anything in your portfolio that you'd be looking to rationalize in The U. S. Or North America more broadly? And then how do you expect the rest of the industry to respond some of the new capacity that's kind of come online over the last twelve to eighteen months? Thank you.

[Greg Heckman, CEO & Director at Bunge]

Look, we've been very thoughtful about our portfolio, really, everything we've been doing over the last six years, right? It's always continuous improvement. So where we've made our investments, whether it's been debottlenecking or brownfields or greenfields, it's to get our footprint to be the most competitive. So we're running the assets that we're running now because we plan to. We'll constantly evaluate that globally, and that's part of having that global system.

[Greg Heckman, CEO & Director at Bunge]

Our goal, of course, is to have a cost structure and capabilities that are built for any point in the cycle. And yes, during the cycle, at the tougher parts of the cycle, it sends signals. And certain people with cost structures may be shutting down some of these standalone plants and that, they could be different economics than us running it as part of a network here in The U. S. And also as part of our global network.

[Greg Heckman, CEO & Director at Bunge]

So we're just focused on having the most competitive footprint and system for really any point in the cycle. That's kind of our responsibility.

[Steven Haynes, Vice President, Equity Research at Morgan Stanley]

Okay. Thank you.

[Operator]

The next question from the phone comes from Andrew Strelzny with BMO. Please go ahead.

[Andrew Strelzik, Equity Research Analyst at BMO Capital Markets]

Hey, good morning. Thanks for taking the questions. My first one, you mentioned being open on the majority of your capacity for the back half of the year. And I guess I'm just curious if you're managing or how you're managing your forward book right now in an environment that's relatively soft and could look a lot different later in the year. Have you changed that approach at all?

[Andrew Strelzik, Equity Research Analyst at BMO Capital Markets]

I'm just curious how that compares maybe to normal. Any color on that would be great.

[Greg Heckman, CEO & Director at Bunge]

Sure. Our team is constantly focusing our customers on both ends of the value chain and what they're doing to manage their risk. I will tell you, in this environment, we have seen everybody go to more spot, right? So there is less done on the forward curve as people don't know what to do with some of this uncertainty. And so they pulled in.

[Greg Heckman, CEO & Director at Bunge]

The farmers have been more spot sellers. The end consumers, whether it's feed, food or fuel, unless they've got margins, they've been more spot buyers. So that's led to less of a forward book. Now we've got different ways to manage our risk and we're always evaluating what the supply and demand tells us, what the outlook looks like and where globally we want to be placing our hedges and locking in margins as they occur versus how we believe they will and as they have versus history based on what the supply and demand numbers are telling us. But there's less on right now, one, because we're looking at what the curves are telling us and what we believe.

[Greg Heckman, CEO & Director at Bunge]

Then part of it is driven from customers on both sides. When you get in that close in thirty to ninety days, that's when the logistics really start driving the activity really for all the participants in the market. And of course, that's why you've got more visibility on the front end, things on the books and maximize those logistics to serve everyone.

[Andrew Strelzik, Equity Research Analyst at BMO Capital Markets]

Right. Okay. Okay. That makes sense. And my second question, and I don't know if you'll be able to answer this with any specificity, but I'm just trying to think about the right earnings base for the core business.

[Andrew Strelzik, Equity Research Analyst at BMO Capital Markets]

And obviously, this year has a ton of disruption that maybe is abnormal, right, and depressing numbers this year. Is there any way to frame kind of how much you think that, that is impacted relative to your $775,000,000 kind of outlook? Yeah, is there any way to think about how much that's impacting the year and what maybe a more normal earnings base would look like? Thanks.

[John Neppl, Chief Financial Officer at Bunge]

Yeah, look, I think this is John. Certainly, we're in a little bit more challenging environment this year, just given all the uncertainty versus where we would expect to be kind of in a mid cycle. And when we look at that, it's really driven by more challenging merchandising environment. This year is one of the big drivers. And as we look at just take us back to our original mid cycle modeling.

[John Neppl, Chief Financial Officer at Bunge]

At this point in time, a couple of years later, a lot of the projects that we had slated are still under construction. And so those haven't contributed yet. And we didn't expect those two yet at this point in time. But we've made some divestments along the way in Russia, Ukraine impact. Those things have kind of pulled our results down from the mid cycle.

[John Neppl, Chief Financial Officer at Bunge]

And then certainly on margins have largely held in versus kind of how we'd see mid cycle. Other than the refining side, those have actually been better, more longer. But merchandising has been more challenging for us. And on the cost side, we experienced a couple of years of high inflation. So overall, offset to some degree a little bit by some of the actions we've taken around share buybacks and things.

[John Neppl, Chief Financial Officer at Bunge]

Ultimately, it's hard to gauge what the $775,000,000 would be without the current environment we're in. Certainly, things improve here in the back half of the year, we'll have a better sense next year of kind of earnings power going forward, excluding Bytera. Of course, that will have a big impact on our outlook as we integrate that business. And then we've got capital projects are going to be coming online 2025 and 2026 and 2026 that will have a further impact ongoing. But it's as you can imagine, pretty hard to put a fine point on what the $775,000,000 would have been had we not had all this volatility this year and we're to get every dollar we can.

[Andrew Strelzik, Equity Research Analyst at BMO Capital Markets]

Sure. Absolutely appreciate that and appreciate the perspective. Thanks.

[Operator]

The next question comes from Ben Heckler with Barclays. Please go ahead.

[Analyst]

Hi. This is Raghi going on for Ben. I just have some questions for some timeline questions. So first on the milling business, what do you see as the timeline to close? What regulatory processes are we still waiting on?

[Analyst]

And do you foresee any risk? And also for biofuel, thank you so much for the color on the call. When do you expect an update on that? Thanks so much.

[John Neppl, Chief Financial Officer at Bunge]

In terms of corn milling, we're hoping it's purely a U. S. Business. And so it'll just need to go through the domestic regulatory process. But we feel like we've got a chance to get that closed by the end of Q2, latest early Q3 is kind of our view right now. Can you maybe clarify your second question on biofuels?

[Analyst]

And to kind of predict when you're going to get an update from the EPA or any other body. But do you have I mean, we were talking about the volumes that were estimated. Do you would kind of expect something from the EPA on volumes within

[John Neppl, Chief Financial Officer at Bunge]

the RVO update?

[Analyst]

On RVO Yes.

[John Neppl, Chief Financial Officer at Bunge]

Mean, it could be any day. We're thinking by May is a good chance that we'll hear something. Of course, they're not obligated to come out with anything until later in the year, but they've indicated as near as we can tell, can do something as early as sometime in mid this month and we'll see.

[John Neppl, Chief Financial Officer at Bunge]

We're anxiously watching just like everybody else. And ultimately, I think they're being very thoughtful. They're listening. Greg talked about the coalition that was put together with farmers and the energy companies and ag companies, they're listening. And so hopeful that they're formulating the right approach and will be not soon.

[Operator]

This concludes our question and answer session. I would like to turn the conference back over to Greg Heckmann for any closing remarks.

[Greg Heckman, CEO & Director at Bunge]

I'd like to thank everyone for joining us today. Thank you for your interest in Bunge. We continue to have great confidence in our team to be able to deliver for our customers, both farmers and consumers, whatever challenging environment that we're in. We look forward to speaking with you again soon, and have a great day.

[Operator]

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

Participants

Analysts

• Ruth Ann Wisener, Vice President, Investor Relations at Bunge
• Greg Heckman, CEO & Director at Bunge
• John Neppl, Chief Financial Officer at Bunge
• Salvator Tiano, Equity Research Analyst at Bank of America
• Tom Palmer, Vice President & Senior Equity Research Analyst at Citi
• Manav Gupta, Executive Director at UBS Group
• Heather Jones, Founder at Heather Jones Research
• Pooran Sharma, Managing Director at Stephens Inc
• Derrick Whitfield, Managing Director at Texas Capital
• Steven Haynes, Vice President, Equity Research at Morgan Stanley
• Andrew Strelzik, Equity Research Analyst at BMO Capital Markets
• Analyst