Bunge Limited (NYSE:BG) today reported second quarter 2021 results

• Q2 GAAP EPS of $2.37 vs. $3.47 in the prior year; $2.61 vs. $1.88 on an adjusted basis excluding certain gains/charges and mark-to-market timing differences
• Continued strong Agribusiness execution across the global network
• Outstanding Refined and Specialty Oils results driven by increasing demand and record refining capacity utilization
• Increasing full-year adjusted EPS outlook to at least $8.50 based on strong Q2 results
• Updating mid-cycle earnings baseline with $2 per share increase reflecting structural changes in oilseed market environment and greater execution benefits from new operating model

• Overview

Greg Heckman, Bunge's Chief Executive Officer, commented, "Our team outperformed expectations by effectively navigating global volatility to produce another strong quarter of results. Our industrial, commercial and risk management teams collaborated throughout the value chains, optimizing trade flows and production volumes while reducing unplanned downtime.

“With an accelerating structural shift in demand for sustainable food, feed and fuel, Bunge’s position in the global agribusiness supply chain provides growing opportunity to partner with customers to meet their needs in this changing environment,” continued Mr. Heckman. “We are proud of our work with farmers and customers to sustainably connect supply and demand, develop innovative products and services and create new plant-based solutions.”

• Financial Highlights

• Second Quarter Results

Core Segments

Agribusiness

In Processing, higher results in North America and Argentina were more than offset by lower results in Europe and to a greater extent in Brazil, which included a decreased contribution from soybean origination due to an accelerated pace of farmer selling in the prior year.

In Merchandising, improved performance was primarily driven by higher results in ocean freight, due to strong execution, and our global grain value chains, which benefited from increased volumes and margins.

Refined & Specialty Oils

Refined & Specialty Oils Summary

The outstanding performance in the quarter was largely driven by higher margins and record capacity utilization in North America refining, which benefited from strong food service demand and increased demand from the renewable diesel sector. Improved results in South America were due to the combination of higher margins and lower costs, more than offsetting lower volumes. Europe benefited from increased volumes and margins.

Milling

Milling Summary

Higher volumes, lower costs and good supply chain execution in South America were the primary drivers of improved performance in the quarter. Results in North America were comparable with last year.

Corporate and Other

Corporate and Other Summary

The increase in Corporate expenses during the quarter was primarily related to performance-based compensation accruals. The increase in Other was related to our captive insurance program.

Non-core Segments

Sugar & Bioenergy Summary

Improved results in the quarter were primarily driven by higher ethanol volume and margins. Prior year results were negatively impacted by approximately $70 million in foreign exchange translation losses on U.S. dollar denominated debt of the joint venture due to depreciation of the Brazilian real.

Cash Flow

Cash used for operations in the six months ended June 30, 2021 was $1,436 million compared to cash used of $1,502 million in the same period last year. Adjusting for the proceeds from beneficial interest in securitized trade receivables, cash provided from operating activities was $613 million compared with cash used for operating activities of $754 million in the prior year. Funds from operations (FFO) adjusted for notable items and mark-to-market timing differences was $900 million compared to $817 million in the prior year⁽⁵⁾.

Income Taxes

For the six months ended June 30, 2021, income tax expense was $242 million compared to an income tax expense of $113 million for the prior year. The increase in income tax expense is due to higher pre-tax income, partially offset by a lower estimated effective tax rate for 2021.

COVID-19 Update

Bunge continues to take proactive steps to protect the health and safety of its employees, their families and the communities in which it operates. Through an internal task force, the Company closely monitors developments related to the pandemic and provides guidance to its facilities worldwide. Each of Bunge’s facilities around the globe is taking steps to respond to COVID-19 based on the nature of its operations and the guidelines from and actions being taken by local governments. The Company has continued to restrict travel, follow upgraded cleaning practices at its facilities and offices, put in place remote work arrangements for teammates wherever possible, reduce staffing in its production and other facilities and keep social distancing and other safety related measures in place. Bunge is strongly encouraging its employees to be vaccinated when available in their countries, and facilitating this when possible.

Numerous countries around the globe, including places where Bunge operates production facilities or maintains offices, have continued to impose quarantines and significant restrictions, including shelter-in-place or stay-at-home orders. Additionally, a rise in the number of observed COVID-19 cases in certain parts of the world may lead to governments re-imposing travel and work restrictions or imposing additional restrictions. In locations where such restrictions are in place, Bunge has been deemed an essential or life-sustaining operation. To date, the Company has not seen a significant disruption in its supply chain, has been able to mitigate logistics and distribution issues that have arisen, and substantially all of its facilities around the world have continued to operate at or near normal levels. Bunge continues to monitor local, regional and national governmental actions that could limit or restrict the movement of agricultural commodities or products or otherwise disrupt physical product flows or its ability to operate in the future.

• Outlook

We are increasing our full-year 2021 EPS outlook to reflect our strong second quarter results. We are now forecasting full-year 2021 adjusted EPS of at least $8.50 per share.

In Agribusiness, results are expected to be modestly up from our previous outlook, but still forecasted to be down from a very strong 2020.

In Refined and Specialty Oils, results are expected to be up from our previous outlook reflecting our strong second quarter results and positive trends in North America being driven by increased demand from food service and renewable diesel.

We continue to expect results in Milling and Corporate and Other to be generally in line with last year.

Additionally, the Company now expects the following for 2021: an adjusted annual effective tax rate in the range of 17% to 19%; net interest expense in the range of $220 to $230 million; capital expenditures in the range of $450 to $500 million; and depreciation and amortization of approximately $420 million.

In Non-Core, full-year results in the sugar and bioenergy joint venture are expected to be a positive contributor.

• Updated Mid-Cycle Earnings Baseline

The Company has also updated its mid-cycle baseline EPS. This update reflects structural improvement in oilseed market fundamentals, as well as greater benefits following the change in Bunge’s operating model to a global value chain approach. We now estimate our mid-cycle EPS is $7, an increase of $2 from the baseline provided at the Company’s Virtual Business Update Meeting on June 24, 2020.

• 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 Wednesday, July 28, 2021 to discuss the company’s results.

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

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.

To access the webcast, go to “Events and presentations” in the “Investors” section of the company’s website. Select “Q2 2021 Bunge Limited Earnings 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.

A replay of the call will be available later in the day on July 28, 2021, continuing through August 28, 2021. 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 10157435. A replay will also be available in "Past events" at "Events and presentations" in the "Investors" section of the company's website.

• About Bunge Limited

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 put quality food on the table, increase sustainability where we operate, strengthen global food security, 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 improve the productivity and environmental efficiency of agriculture across our value chains and to bring quality products from where they’re grown to where they’re consumed. At the same time, we collaborate with our customers to create and reimagine the future of food, developing 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 more than 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, 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 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: industry conditions, including fluctuations in supply, demand and prices for agricultural commodities and other raw materials and products used in our business, fluctuations in energy and freight costs; competitive developments in our industries; the effects of weather conditions and the outbreak of crop and animal disease on our business; global and regional economic, agricultural, financial and commodities market, political, social and health conditions; the impacts of pandemic outbreaks, including COVID-19; the outcome of pending regulatory and legal proceedings; our ability to complete, integrate and benefit from acquisitions, dispositions, joint ventures and strategic alliances; our ability to achieve the efficiencies, savings and other benefits anticipated from cost reduction, margin improvement, operational excellence and other business optimization initiatives; changes in government policies, laws and regulations affecting our business, including agricultural and trade policies and environmental, tax and biofuels regulation; our capital allocation plans, funding needs and financing sources; changes in foreign exchange policy or rates; the outcome of our portfolio rationalization initiatives; the effectiveness of our risk management strategies; our ability to attract and retain executive management and key personnel; operational risks, including industrial accidents, natural disasters and cybersecurity incidents; 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.

• 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 June 30, 2021 and 2020.

See Definition and Reconciliation of Non-GAAP Measures.

Corporate and Other

EBIT for the quarter ended June 30, 2020 included a $66 million charge primarily related to a provision against an aged receivable dating from 2015 that in the quarter ended June 30, 2020 became deemed uncollectible as part of an anticipated legal settlement. For this matter $51 million was recorded in SG&A and $15 million was recorded in Other income (expense) - net.

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 six month periods ended June 30, 2021 and 2020.

Core Segments

Refined and Specialty Oil Products

EBIT for the six months ended June 30, 2021 included $170 million in gains on sale of assets, comprised of a $151 million gain on sale of our Rotterdam Oils Refinery, at Bunge's 70% share, and a $19 million gain on sale of an oils packaging facility in Mexico, both recorded in Other income (expense) - net.

Corporate and Other

EBIT for the six month period ended June 30, 2020 included a $66 million charge primarily related to a provision against an aged receivable dating from 2015 that in the quarter ended June 30, 2020 became deemed uncollectible as part of an anticipated legal settlement. For this matter $51 million was recorded in SG&A and $15 million was recorded in Other income (expense) - net. EBIT for the six month period ended June 30, 2020 also included $5 million of charges related to the relocation of Bunge’s global headquarters from White Plains, New York to St. Louis, Missouri, included in SG&A.

• Consolidated Earnings Data (Unaudited)

• Condensed Consolidated Balance Sheets (Unaudited)