Good day and welcome to the Bunge Limited Second Quarter 2023 Earnings Conference Call. Please note today’s event is being recorded. I would now like to turn the conference over to Ruth Ann Wisener. Please go ahead. Thank you, operator, and thank you for joining us this morning for our second 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 in the Investors section of our website at bunge.com under Events and Presentations. Reconciliations of 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 2 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. 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 Heckman, Bunge’s Chief Executive Officer; and John Neppl, Chief Financial Officer. I’ll now turn the call over to Greg.

Thank you, Ruth Ann. Good morning, everyone. I want to start by thanking the team for their dedication and focus throughout the quarter. Our performance proves that we can execute on big strategic moves like entering into our business combination agreement with Viterra while continuing to keep our eye on the ball operationally. We clearly had a lot going on over the past several quarters, and this team stayed sharp in our day-to-day business, delivering outstanding results and continuing to serve our customers at both ends of the value chain. At the same time, we capitalized on this unique opportunity to enhance the Bunge franchise for the future. John and I, along with the entire leadership team, are extremely proud of this work. We continue to make progress on our combination with Viterra and filed our preliminary proxy statement in connection with the proposed transaction last week. We’re excited to bring our teams and assets together to create a premier Agribusiness solutions company built to address some of the most pressing needs of the 21st century across food, feed, and fuel. Turning to the second quarter, it was a dynamic environment and our team showed agility. They did a great job of managing against the downside and being smart with the opportunities that were available. In particular, we were able to use our footprint and value chain connectivity to optimize margins as market conditions changed later in the quarter. While volatility can provide opportunities, it’s difficult to predict the timing and where within the value chain those opportunities for upside will appear. However, our ability to execute in rapidly changing environments gives us confidence that we can create value over the long term. We also saw benefits from our investments in maintenance and productivity with improved reliability and reduced the amount of unplanned downtime across our platform. Looking ahead to the remainder of the year, and based on the forward curves today and on the market environment, which from a macro and geopolitical environment is as complex as we’ve ever seen, we’re increasing our full-year adjusted EPS outlook to at least $11.75 per share. I’ll hand the call over to John now to walk through our financial results and outlook in more detail, and we’ll then close with some additional thoughts.

Thanks, Greg, and good morning, everyone. Let’s turn to the earnings highlights on slide 5. Our reported second quarter earnings per share were $4.09 compared to $1.34 in the second quarter of 2022. Our reported results included a positive mark-to-market timing difference of $0.59 per share and a negative impact of $0.22 per share related to one-time items. Adjusted EPS was $3.72 in the quarter versus $2.97 in the prior year. Adjusted core segment earnings before interest and taxes, or EBIT, was $893 million in the quarter versus $709 million last year. Agribusiness adjusted results of $674 million were up compared to last year. In processing, higher results in the quarter reflected better year-over-year performance across all value chains, driven in part by strong Brazil soybean origination, which contributed to higher crush results in Brazil and our destination crush operations in Europe and Asia. In the U.S., results were also higher as we entered the quarter with a significant portion of our capacity locked in at higher margins. In merchandising, higher results in global oils and grains were more than offset by lower results in our financial services and ocean freight operations, which had difficult comparisons to a particularly strong prior year. Refined and Specialty oils continued its trend of strong performance, though results were slightly lower than last year. Our results in North America driven by food service and fuel demand were offset by slightly lower results across Europe, South America, and Asia. In Milling, low results in the quarter were primarily driven by our South American operations, which were negatively impacted by the small Argentine wheat crop. Segment results in the prior year benefited from effective risk management of our supply chains during a period of high market volatility. The increase in corporate expenses in the quarter primarily reflected planned investments in growth and productivity-related initiatives that will pay off in future periods. Lower other results related to our captive insurance program and Bunge Ventures. Results on our non-core sugar and bioenergy joint venture included a $39 million benefit from the reversal of evaluation allowance. In addition, improved results reflected higher sugar prices that more than offset lower ethanol prices. Adjusting for notable items, net interest expense is $78 million in the quarter, which was down slightly compared to last year, as higher average variable rates were offset by higher interest income. For the six months of the year, income tax expense was $381 million compared to $144 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. Let’s turn to slide 6, where you can see our adjusted EPS and EBIT trends over the past four years, along with the trailing 12 months. Our team continues to deliver excellent performance, especially when considering the rapidly changing market conditions we have faced, while also executing on a variety of internal initiatives to improve our capabilities. Slide 7 details our capital allocation of the approximately $1.4 billion of adjusted funds from operations that we have generated year-to-date. After allocating $181 million to sustaining CapEx, which includes maintenance, environmental health, and safety, we had approximately $1.2 billion of discretionary cash flow available. Of this amount, we paid $180 million in common dividends and invested $360 million in growth and productivity-related CapEx, leaving approximately $630 million in retained cash flow. We have not purchased any shares this year as a result of our discussions to combine with Viterra. However, we recently announced that our board has expanded our existing share repurchase program to $2 billion. We want to be in the market as soon as possible, and we expect that a meaningful portion of these repurchases will be executed prior to the close of the Viterra transaction, with the remainder to be completed within 18 months of that date. As shown in Slide 8, at quarter-end Readily Marketable Inventories, or RMI, exceeded our net debt by approximately $3.6 billion. This reflects our use of retained cash flow to fund working capital while reducing debt. Slide 9 highlights our liquidity position. At quarter-end, all $5.7 billion of our committed credit facilities was unused and unavailable, providing ample liquidity to manage our ongoing capital needs. And working with our key banking partners, we also recently secured $8 billion in the form of term loan commitments to fund our combination with Viterra. Please turn to Slide 10. The trailing 12 months suggested ROIC was 20.3%, well above our RMI adjusted weighted average cost of capital of 7.7%. ROIC was 15.1%, also well above our weighted average cost of capital of 7%. Moving to Slide 11, for the trailing 12 months, we produced discretionary cash flow of approximately $2.1 billion and a cash flow yield of 19.2%. Please turn to Slide 12 and our 2023 outlook. As Greg mentioned in his remarks, taking into account the first half of the year results and the current margin environment in forward curves, we have increased our full-year 2023 adjusted EPS outlook to at least $11.75 per share. In Agribusiness, full year results are forecasted to be down from last year, though slightly better than our prior outlook, as higher results in processing are more than offset by lower results in merchandising. However, depending on how market conditions evolve over the remainder of the year, there could be upside to our segment outlook. In Refined Specialty Oils, full year results are expected to be up from our prior outlook and in line with last year’s record performance. In Milling, full year results are expected to be lower than our prior outlook and significantly down from a strong prior year. In Corporate and other results are expected to be in line with last year. In Non-Core, full year results in our sugar and bioenergy joint venture are expected to be in line with the last year. Additionally, the company expects the following for 2023; an adjusted annual effective tax rate in the range of 20% to 24%, net interest expense in the range of $350 million to $370 million dollars, which is down from our prior outlook of $360 million to $390 million. Capital expenditures in the range of $1 billion to $1.2 billion, which is up to $200 million from our prior outlook reflecting the purchase of a U.S. oil refinery during the second quarter and depreciation amortization of approximately $415 million. With that, I’ll turn things back over to Greg for some closing comments.

Thanks, John. Before turning to Q&A, I want to offer a few closing thoughts. Looking ahead, we remain focused on executing our top strategic priorities to better serve the needs of customers, both farmers and consumers, regardless of the market environment. Over the last several years, we’ve seen more volatility in the market, and we’re all managing through challenges, including food security, market access, and the increasing demand for sustainable food, feed, and fuel production. As the world’s population continues to grow, it will take a collective effort in the industry to more efficiently address these challenges, and Bunge has an important role to play. Together with Viterra, we will be able to utilize our combined platforms and capabilities to more broadly and rapidly expand our work to support sustainable and transparent value chains. This includes promoting sustainable practices such as low carbon product streams, the acceleration of regenerative agriculture to reduce GHG emissions, and, importantly, full end-to-end traceability across major crops. During the quarter, we announced the creation of a regenerative agricultural program in Brazil, in partnership with Orígeo, to support Brazilian farmers in the transition to low carbon agriculture, offering technical support tools, products, and services. The program has already enrolled large-scale farmers, covering more than 250,000 hectares. We also launched a strategic alliance in commercial agreement with Nutrien Ag Solutions to support U.S. farmers in the implementation of sustainable farming practices that will help increase the development of lower carbon products. This alliance will further strengthen Bunge’s connection with farmers in the U.S. and create value for participants across all our value chains. We continue to evaluate and execute on our pipeline of bolt-on M&A opportunities as we work through the process of combining with Viterra. And overall, we’re well positioned to deliver on our purpose of connecting farmers to consumers to deliver essential and sustainable food, feed, and fuel to the world while always looking for ways to improve. And with that, we’ll turn to Q&A.

Thank you. Today’s first question comes from Ben Theurer with Barclays. Please go ahead.

Good morning, Greg, John, congrats on the very strong results first of all. So it’s like a kind of two-sided question. Obviously, thanks for the clarity on the guidance increase in which you’re implying into it. But in the commentary in the release, you talk about the potential upside depending on market conditions. And I really like to understand and maybe ask you to select a little bit on the upside. What are the factors that could drive that earnings higher and what’s the potential here? Also in light of like just the general market conditions you’ve talked about, the geopolitical stress. We talked about weather. There’s El Niño coming in. So how does this all kind of combine and play a role to potentially help you boost earnings above what is that at least $11.75 target? Thank you.

Sure. Let me start here and John can add in if I miss anything here. Look, I think we feel good about the at least $11.75. And, we’re also trying to evaluate the landscape on what’s the size of the plus as we go forward. But if you look, the meal and oil demand drivers continue to be intact. You look globally and between pork and poultry, the numbers are stable. It looks like wheat is not going to be as competitive as it’s a little tighter. So that should help meal as far as inclusion in the rations. And just generally, food and fuel demand for oil both remain solid. So when you think about the upside rate, merchandising is always the one that’s tough to forecast. Not only the timing of it, but where within the value chain and within those opportunities are going to happen. But look, I think what we’ve seen the last four years and the challenges and again here in this last quarter that this team does a heck of a job when the opportunities are there on bringing it home and executing. And so we’ll continue to focus on that. China, I think there’s still the opportunity for improved demand there with the recovery. So that’s one we’re watching. And then we’re now seeing the dislocation from the small crop in Argentina start to play out here in the second half. And we’re having to call on capacity in the rest of the world. So with that dislocation, really, how will crush margins play out? So that’ll be a key to watch with a little bit possible upside there. And then lastly, I think we saw it just starting the last time we all talked was the renewable diesel capacity starting to run better, seeing a little stronger demand for oil here in the U.S. And that’s continued. So we’ll be watching closely how they run in the second half. So I think those are some of the key flags. And of course, weather is always out there. We’ve got to make this crop in North America. That’s important. And then, of course, the humanitarian corridor now closed again, making it more difficult to get those supplies out of Ukraine and creating more volatility and dislocation. Of course, the market will do its job and try to bring what it can out over land. But that situation could change pretty rapidly. So that’s another one we continue to watch.

Yes, Ben, I’d also add that coming into Q3; we were fairly covered in terms of crush. So upside, if there’s upside in crush, it’s more likely to come in Q4, where we’re a lot more open in terms of our capacity. And margins are pretty weak in Brazil right now. And so we’ll keep an eye on that as well. Any improvement there obviously is going to be helpful.

Okay. And then just one quick follow-up. You talked about the renewable diesel capacity. I mean, obviously, we got the final decision from EPA. How do you feel about the final decision, no major change to what came out back in November, December, but just like the market itself and how that’s going to play a role for the demand going forward for the feedstock you’re providing?

Yes, I think when you, Ben, this is John, when you look forward, and one of the things we’ve done is modeled kind of the look based on RVO thresholds, it’s still things are pretty tight going forward, based on what’s been announced in terms of crush capacity, and what’s going to be needed in terms of feedstock. What I would consider fairly modest capacity utilization numbers in the RD industry, things are still going to be very tight. So we feel pretty good about where it’s headed. We obviously do a lot of business in the energy space and feel good about the volume increase that we’re seeing and the commitment to that. And so we’re still bullish.

Thank you. And our next question today comes from Salvator Tiano with Bank of America. Please go ahead.

Yes, thank you very much. So firstly, I just wanted to ask about the processing business performed extremely well. If you can tell us a little bit about your expectations, was this, did this performance come more from higher crush margins? Or was it the better trading environment in Brazil for oilseeds that helps you there?

Yes, a little bit of both. If you look when we came into the quarter, the team had done a pretty good job of getting us the capacity hedged out during some of the crush margins. So when things got weaker there for a period of time during the quarter, we didn’t have to participate. And then the team, I think, did a very good job on what capacity we did have open on being very patient. And what we saw in the numbers and as Argentina crush was slowing down, that we felt things had to recover. So they also did a great job with the capacity we did have open to being very patient and hedging that out late in the quarter as things were covered. We also had the tail end of the soybean harvest there in South America and our origination footprint down there as you know is very good. The team did a great job. Also, we not only got the benefit in the origination in our crushing in Brazil, but of course that feeds our destination crush in Europe and in Asia and China and Vietnam. So we got the benefit as well in crushing there. And then it’s of course as we got into the corn harvest in Brazil right on the back of the big bean harvest we had talked about things we thought were going to be pretty stressed from a logistics storage and handling and our footprint is set up to handle that domestic demand as well as that export demand and the team did a very good job managing that not only in the bean origination but then on the exports on the corn side and the corn value chain executed very well. So it’s just real good execution across the opportunities.

Perfect. Thank you. And I also wanted to ask a little bit about the Refining Specialty Oils business. I just feel demand was good, especially North America. Can you let us know a little bit how does your end markets look today versus a few years ago when we think about the food versus fuel demand?

Sure. Look, the RSO and the specialty oils, specialty fats and oils team continues to do a great job serving our customers there. Over 80% of our oil still is going into the food channels even though the fuel is growing and very important to us. And I think we're benefiting from what we saw on the back of the pandemic and the supply chain challenges that we were there for our customers. And so we've grown with those key customers, and we continue to help innovate and supply them as we're seeing some of these value chains switch around with the growth in the fuel demand. I think you remember we have our new refinery that we bought from Fuji down in Louisiana that’s been a great addition here in North America continuing to serve our food customers and the team has done a great job of kind of getting that folded into our network and providing different seed and tropical oils to those customers as we bring all those food customers on and get them approved, so we’ve been excited about that. And just overall the environment in North America has remained strong. We’ve seen some channel switching, right, we’ve seen a little bit of switch from packaged foods into the direct-to-consumer rather than packaged foods from the brands maybe in the private label. And we’ve seen some switching on the food service side more into the quick service restaurants, but that’s not necessarily negative total overall volume for us in oil demand, but the consumer is doing a little bit of switching, but overall demand continues to be there.

Perfect. And if I may just ask a little bit also for more clarity on as we think about your oil volumes that do go into renewable diesel in general and renewable fuels, how do you compare the volumes that are sold as crude oil versus the volume that you’ll sell as refined and is there a shift in the positive quarters to what’s selling more refined oil towards fuel versus crude oil?

I know I think as the industry’s come up, right there hasn’t been as much pre-treatment built in the beginning. So we haven’t seen any big changes in the mix of refined versus crude. I think we’ve all talked about that going forward in the coming years we expect maybe to see some of that switch move from refined and move back to see the amount of crude growth. I mean that doesn’t mean refined will go down, but you may see the crude demand grow as pre-treatment comes in but the demand for oil overall increased. But I think that’s we’re looking out 24 and beyond don’t really see any big switch here in 23. I don’t think in our book.

Thank you. And our next question comes from Ben Bienvenu with Stephens. Please go ahead.

Hey, thanks, good morning and congrats on the exceptional quarter. I want to ask a little bit about the processing business just because 2Q was so exceptional. When you looked at the back half of the year the curves are quite constructive it looks as though as you said the underlying factors from meal and oil are positive, can you tease out a little more as you look to the back half, what in the second quarter was kind of unique to the second quarter that’s maybe inherently difficult to predict recurring in the back-half versus just uncertainty broadly for the segment?

Yes, well, I think in the second quarter, of course, we had the last of the Brazilian harvest, right? The origination there. And I think the focus really here in the second half comes to Argentina where you had a crop that was 44 million tons in 2022, and here in 2023 it’s probably in the low 20s. And so we’re going to really feel that that crush missing in Argentina, that export of meal and oil. So that will be the key how that plays out here for the balance of Q3 and Q4. And then continuing to make the crop in North America and seeing the bean crop come in for Q4 to support the crush margins there in the U.S. And the other is, it looks like some of the global demand, and primarily demand to China being filled by South America that keeps the beans home in the U.S., which is probably constructive to crush there. So those are be some of the key things to watch as well.

Okay. Fair enough. My second question is a little bit longer-term oriented. You guys filed your proxy statement late last week; there were a number of interesting things in there. The long-term forecast that you presented, I’m curious if you could give us some context around kind of the confidence level in those forecasts, recognizing it’s hard to forecast the business of a long time period, but presumably, those were presented to the board as justification for the value of the Viterra deal. Can you talk a little about the assumptions that went into those forecasts? They look pretty constructive. And then second in the proxy, there were some incremental synergies that you called out as well, and kind of to the extent that you can shed light on how you arrived at the synergies above and beyond the $250 million would be of interest as well.

Sure. Ben, I can take that. Yes, in terms of the long range forecast, our forecast is there’s principally what we rolled out a year ago in our strategic financial model in terms of getting to the $12 a share by 2026, the $11 to $12, the 11 plus the upside probably into ’26 and ’27. So very much the basis of our forecast was driven off of that same outlook, and we still feel like that’s largely intact. And so we didn’t have to do a lot of recreation to develop these forward numbers; we already had them, and obviously tweaked those a little bit here and there, but largely right on track. With respect to Viterra, they don’t do a forward forecast, they don’t do one. So we did put something together that we felt was a pretty good indication of the baseline for them over the next several years, and obviously, our goal would be to outperform that as we move forward. In terms of the synergies, we had disclosed $250 million at the time we made the announcement, that was focused solely on cost. In the proxy, we also included about $80 million of what we would call kind of operating synergies; so things around logistics and procurement and things that weren’t purely cost-related, but where we saw some opportunity from an operational standpoint. But none of that includes what we consider commercial synergies, the way we’re going to operate going forward and the opportunity that combined company is going to have from a commercial standpoint transaction standpoint. So still, a bigger number than what we used in our modeling and what we used in the announcement and what we used in our original accretion calculation, but still not including the upside that we see in the commercial side going forward.

Well, that’s great. Thanks so much, Greg, John. I appreciate you taking my questions.

Thanks, Ben.

Thank you, and our next question comes from Manav Gupta with UBS. Please go ahead.

So guys, my question relates to an announcement you made about a month ago, where you are acquiring some businesses in Argentina with your partner Chevron. So help us understand the thought process behind this acquisition. And the broader question is Chevron obviously wants to go much bigger in sustainable aviation fuel. They will need a lot of feedstock. So do you see your partnership with Chevron extending beyond where it is right now?

Yes. We love our partnership with Chevron. We’re just at the beginning of that relationship. But we’re very like-minded about each leveraging our strengths individually as well as collectively. And I think that’s an example of an opportunity that we identified to invest in another novel seed that could create a low CI feedstock for, as you say, not only renewable diesel, but maybe long-term sustainable aviation fuel. And so you’ll see us continue to look for those opportunities, not just in North America, but globally, as shown by the Argentine investment, to do things that meet the needs of the marketplace because we can serve both food and fuel. The market will work. There will continue to be innovation. And we’re just really pleased to have a partner like Chevron to look at a number of these opportunities with.

Yes. I would say to Manav, I’d add on top of that, that SAF absolutely is a long-term focus. And I think a lot of what we’re doing today with Chevron on the renewable diesel side will very much support a transition to SAF over time as they look to do that. We’ll be right here providing the necessary feedstock, both soybean oil and more and more low CI feedstocks as well.

We agree. It looks like a great partnership. My quick follow-up is we have seen a very strong rebound in the soy cost spread in the U.S. The other regions are responding, but at a slower pace. So help us understand a little bit better why has the U.S. crush spread rebounded so much faster than other places?

Well, I think some of it how the farmer marketing responded. We saw some weather concerns. You saw the markets rally on those weather concerns, and that created an opportunity for the producer to market somewhere of their crop. So that made the beans available here even though we’re in the old crop. And then, of course, the meal and oil demand has hung in there. As we talked about, the animal numbers are still there. Animal profitability has improved a little bit. And then on the oil side, the food demand, while we’re seeing channel switching, the food demand has hung in there and the energy demand is growing, so just a good demand environment.

Thank you. And our next question comes from Adam Samuelson of Goldman Sachs. Please go ahead.

Yes. Thank you, good morning, everyone. I would like to follow up on Manav’s last question regarding Brazil's crush margins, which you've mentioned in your prepared remarks. It seems that the forward curves are less robust. What do you believe is preventing Brazil from experiencing the same crush margin strength that we are seeing in North America at this time? Considering that Argentina's export competition is not an issue and the oil demand appears to be healthy, what specifically is holding back Brazil? It seems to be a significant opportunity for improvement in the second half guidance.

Yes. Brazil has been pretty good until recently. So I think we’re encouraged as we see less pressure from Argentina here in the second half. Look, we’ve got an election coming up, and devaluation is possible. But we really are starting to feel the shortage of beans there in Argentina, and we’re not going to feel it just in Brazil, but overall. So I think we’re encouraged for Q4. But the global system, it will be more than just Brazil has got to step up. We got lower energy costs in Europe, and there’ll be less pressure from being oil exports out of Argentina in Europe as well. So I think it’s an encouraging setup.

Yes. I think on top of that, Adam, we have really good strong farm origination in Q2. And since then that has slowed down a bit, and we’ll see how it transpires as we go through the balance of the year, whether liquidity will be there or not in Q4. And to Greg’s point earlier, soybean oil is a little heavy in Brazil right now. But demand for biodiesel; we’ll see how that plays out the balance of the year. But certainly an area where things line up, there could be some upside.

All right. That’s very helpful. And if I could just ask a follow-up on the origination side for Brazil on corn. And certainly, that was or appeared to be a nice contributor in the second quarter. Just can you be clear on what is actually assumed from a corn origination perspective in the second half of the year? We see that with a large crop and still some of the logistics pressures, that that should be a pretty healthy contributor both absolute and year-over-year in the second half that didn’t quite have last year.

Yes, it was definitely helped contribute there in Q2. And then, of course, we saw some of the demand shift to Brazil from the U.S. as that corn crop was harvested, and the markets adjusted. That, of course, is in our forecast for the book that we’ve got on and what we expect from execution is in our forecast for the second half, although as always with merchandising, we’re forecasting what we can see. And as things shift around, there could be some continued upside that the team will take advantage of as we get other dislocations. And as things play out in Ukraine as well as we get the final development of what’s the size of that U.S. crop going to be.

Thank you. And our next question comes from Steven Haynes with Morgan Stanley. Please go ahead.

Hey, thanks for taking my question. I wanted to ask a question on your JV on the West Coast with plans to triple mill capacity in the coming years and given that it’s on the West Coast probably eliminates some destinations. But where are you kind of expecting that soy yield to end up? And more specifically, is it kind of targeting China? Or just kind of any thoughts generally on where you see some excess soymeal production from the U.S. finding its way overseas?

Yes. It’s definitely the Asian demand in general. And as a reminder, one of the great things about our team, we’ve got a lot of capillarity and granularity in our meal distribution and merchandising. Today, we market more meal than we produce. We actually have to buy market in from the market to serve our customers. So we’re excited about that investment out of Longview to add meal handling capacity. So we’re going to be able to handle more. It also makes us more efficient, which will help serve those end customers and also provide a market as some of the additional crush comes on here in the U.S. and where already we talked about the Destrehan project, where we’ll be expanding with our Chevron joint venture. Our crush there will have swing to soft. But we’re, if you remember right, we’re right there at New Orleans. So again, able to export that meal and so this is kind of a parallel investment if you think about it in the P&W to get that meal that naturally flows off the West into those Asian demand markets.

Thank you. And our next question today comes from Thomas Palmer of JPMorgan. Please go ahead.

Good morning and thanks for the question. Your tone has been quite positive I think today with a few call-outs about what could drive upside to guidance. So I don’t think there are any major concerns maybe in the second half. But at the same time, you just beat by over $1 on the EPS side. The low end of your guidance was boosted by $0.75. So I thought I’d at least ask, relative to your expectations, are there emerging risks that we should be monitoring as we look towards the second half of the year?

I think we’re always managing the volatility and the dislocation, the things that went into our thought were; one, there was probably some of that earnings that fell in Q2. There might have been a little bit of timing from Q3. So that’s maybe why 100% of that didn’t transfer into the year. And then look, you can have two extremes of volatility, right? This humanitarian corridor getting that supply out of Ukraine efficiently, not only the volume, but what it costs and the effect that has on the other origins in the world market to feed demand. You still got the weather situation playing out in North America, what will that supply be on the corn and the bean side. And then, of course, just the overall how the China demand continue to develop. And then you’ve got Argentina with the election cycle with a possible devaluation. So when I said that if you look at it from a macroeconomic as well as the geopolitical standpoint, I don’t think we’ve probably ever seen quite as complex an environment, and then you can go ahead and throw interest rates and the effect on FX and how that can affect exports as well. It’s a pretty interesting dynamic environment. We’re really glad that we’ve got this great global footprint to operate from. And the great team that’s running it. And I think that’s what we’ve shown that whatever the challenge the team has been doing a great job of delivering. But there are definitely a few uncertainties here in the second half.

Yes. And I think, Tom, given how we came into the quarter coming into Q3 with quite a bit of our crush locked in, Q3 probably won’t get the upside maybe if the market tightens and crush margins move up. Of course, Q4 is fairly open, but that’s been where there’s been the least amount of liquidity. And Brazil is still not super strong there. But again, areas where we take the curves and then if things improve, it’s going to provide us some upside.

Thank you. And our next question today comes from Andrew Strelzik with BMO. Please go ahead.

Hey good morning. Thanks for taking the questions. And you just touched on some of this. But I guess your first half earnings is typically over the last decade or so, like 30% or 40% of what you would generate on an annual basis. Last year was around 50%, and the guidance this year at the $11.75 would be more like 60%. So at the risk of being redundant, I guess, I mean, does it make sense that this year would be so much more first half weighted absent kind of particularly poor U.S. crop? Understanding you just called out maybe a little bit of timing shift between 2Q and 3Q, but more broadly than that.

Yes, Andrew, I can start, and Greg can pop in here. Look, I think yes, last year we were a little closer to 50-50. We were weighted still a little bit more toward the first half of the year. But every year is different. I think the dynamics are we feel really good about the first half that we had, and it’s really probably more an indication of uncertainty in the second half than it is any sort of an unusual trend of earnings between first half and second half. I think just looking at, as Greg alluded to the geopolitical uncertainty, crops playing out, weaker forward curves in some parts of the world that we’re hoping firm up. That’s just kind of how things look today. But I think I wouldn’t point to or I don’t know that we can point to any shift sort of in the global market that caused us to earn more in the first half other than to Greg’s point, we pulled a little bit probably forward just given the strong origination results in Brazil and how that impacted our crush in Europe and China. But we’ll see. I think that we hope to have some upside, and we’ll keep watching things.

Okay. That’s helpful, thank you. And then my other question. You referenced still looking at bolt-on M&A, and obviously, you’ve been spending a lot of growth capital that you’d expected to come on really in 2025. So I guess, number one, with maybe a better operating environment, how is the M&A market right now? How do those opportunities look? And number two, given the strong environment, does it change the timeline for returns on those capital projects? Does it pull them forward? Are you still thinking that 2025 is really kind of the timeline to which you would start to realize that? Thanks.

Yes. I'll start, and then Greg can add in. Our capital expenditure pipeline and growth capital are still on track regarding timing. We expect to start seeing results from those projects in 2025 and 2026. Many of them are significant multiyear builds, but we remain confident in these plans. We are continuously reexamining our assumptions and outlook for these projects and maintain a positive view on our pipeline. Regarding mergers and acquisitions, our top priority is Viterra, as we prepare for integration planning and how the two organizations will operate together. We're doing some preliminary preparations on our side for this. Viterra remains our main focus, but we are also identifying a solid line-up of smaller bolt-on M&A opportunities. This has not altered our outlook on the capital expenditure and growth pipeline related to these smaller acquisitions. We believe Viterra will enhance that. Thus, we continue to be active in this space, with many ongoing initiatives, even if not all of them are immediately actionable. We are certainly busy on that front as well.

Yes, I think John covered it well. Regarding the environment, the complexity we mentioned affects everyone, and the current high interest rate environment is unprecedented. This situation is creating opportunities for bolt-on mergers and acquisitions. However, as John noted, Viterra remains our top priority, and we will ensure nothing interferes with that.

Great. Thank you very much.

Thanks, Andrew.

Thank you. And our next question comes from Sam Margolin with Wolfe Research. Please go ahead.

Hi, everyone. I have a follow-up question about U.S. crush, and I'll approach it from a slightly different angle. You've mentioned several times during the call about crop uncertainty in the U.S., and it seems that this uncertainty regarding soybean supply is impacting oil, since that's where the demand is. This could indicate a potential shift in the usual expectations, as typically, a lower soybean crop would lead to a reduction in crush due to insufficient input. Do you perceive it that way? Is this something familiar, or is there possibly nothing significant to notice here?

Yes. I think the demand historically, right, oil has kind of been the laggard and meal in North America, and Meal has been the driver for a long time. And with this switch and additional demand from energy now, biofuels in general, but renewable diesel specifically, we’re now seeing oil carry a higher share and we kind of think that is there to stay. But the market is going to do its work as that crop comes on. And the global market, we’re already seeing, it will probably be more fed that demand from South American beans where more of the U.S. beans will probably stay at home, and that will help balance the crush and the demand for the meal and the oil.

Thank you for the information. I have a follow-up question. You handle the fluctuations in crush very effectively. You mentioned that a significant portion of your exposure is secured while the later part of the year is more flexible. The curve appears quite robust. Would you consider the $1.40 to $1.60 range in the forward crush as a protective hedge, limited only by liquidity, or are you looking for potential upside?

Yes. Look, I’m really proud of the team being very thoughtful, right on the earnings at risk in the assets. And that’s not only the crushing, but the milling as well as our export assets. And when those margins are there, and we’re constantly evaluating this, not only the public information but our proprietary information and looking at the supply and demand. And you’re right, there is more liquidity close in than there is further out. But when those margins are there, we’ll hedge them out. And I feel like the team is very focused on managing our risk, and we continue to stay focused. It depends on our earnings power, and it also depends on the environment that we’re operating in. And we always push everything through those two lenses. So real proud of the team staying absolutely focused on managing the risk in these assets.

I would like to mention that our coverage is discussed in general terms but is influenced by geography. We view the opportunities through the lens of the value chain, which can differ across regions such as the U.S., South America, Europe, or in the case of destination crush in China. The coverage we provide can fluctuate based on our projections for the market and the forward curve. Overall, I believe the team has excelled in seizing available opportunities. While liquidity can sometimes pose challenges, our disciplined approach within the organization has proven to be highly effective.

Thank you. And our next question comes from Robert Moskow with CD Colin. Please go ahead.

Hi, there. Maybe just a couple of follow-ups. You mentioned the demand outlook in China is still kind of up in the air. I want to know, do you have any more color on what you see in demand in China currently, restaurant versus just packaged food demand or livestock, and then a quick follow-up.

Yes, the animal numbers have continued to hold up despite there being some margin compression there. The customers have been very spot. And I think one of our team talked about the margins that are being like an accordion. They’re kind of up and down. But the way we’re set up over there and support that business, the team is very agile. And so we’ve been able to lock those margins when they are there. From a demand standpoint, we think there continues to be some additional growth. I think our kind of anecdotal, what our team on the ground sees is the domestic demand is kind of back. What we’re really lacking are the places that we serve that are more tourists or business travelers, and the traffic there still we’re seeing as down, although the domestic traffic is up. So that’s where the upside would have to come from.

Got it. And I don’t know if I’ve heard you talk about this recently, but in a higher interest rate environment, I would imagine your balance sheet is a real competitive advantage. And I was wondering if you could talk a little bit about how you’ve used it in your procurement practices in Brazil, and how it’s helped you maybe even in the second quarter. And also, how does it impact the growers? Are their balance sheets impacted by rising debt costs? And does it make them more willing sellers?

Yes. I can discuss the macro environment, and John can provide more details. You’re right; it is a competitive advantage for us. We are a nonbank lender, and we have strong relationships with both our origination customers and our consumers. Their operations and ours are stable, which allows us to maintain long-term relationships where we aim to support their success. Over the past few years, with changes in commodity finance, banks have reduced their involvement, and with rising interest rates and tighter credit, there are fewer alternatives available. We serve an important role through our services, whether it’s with our minority investments in resellers, our long-term farmer partners, or our end users. Our balance sheet is well-managed by John and the team, ensuring we have the necessary liquidity because our business operates differently from industrial businesses. Working capital is essential; it’s the lifeblood of our operations, which is why we prioritize return on invested capital and continually focus on achieving returns on that working capital.

Yes. I would just add, Rob, that as we’ve strengthened our credit profile over the last couple of years, it has given us a competitive advantage because the industry and market structure will generally reflect average interest rates. If we can borrow money at lower rates than others, it provides us with an advantage in funding the RMI that Greg mentioned and also in financing the producers with an appropriate spread. We believe that the Viterra acquisition has been positively viewed from a credit perspective, which should further enhance our ability to borrow money cheaply and maintain the necessary liquidity.

And the farmers themselves, has this influenced their willingness to sell at all? Or is it not like that?

Well, they’re ultimately economic animals, and the cost of carry certainly is important to them. And the market structure, we’ll have that cost to carry in it. But certainly, I think what it’s done for us is tighten our relationship with the farmers. I don’t know Greg, do you want to add anything else there?

Yes. No, we’re always not only originating for our in-country demand but were those markets that destination markets, right, out of Brazil where we’re serving Europe and our Asian markets in China and Vietnam. So our ability to provide that liquidity and even like ’24, we haven’t seen much marketing on the farmers yet, but when they’re there, we have the capacity to be there when they want to go to market and when they want to hedge their risk. So we want to stay focused on helping our customers, not only in consumers but our customer, the farmer be successful, manage their risk in this environment and help them accomplish their profitability goals and their growth.

Thank you. And our next question comes from Brian Wright at Roth MKM. Please go ahead.

Thanks. Good morning. Can you provide an update on the Viterra regulatory approval process? And maybe some color on your term milestones and pathways for this process?

So yes, we’re early on. I think we talked about we just filed the proxy, and we are doing the regulatory filings. So early on in the process. But we continue to engage, and the asset bases are very highly complementary. So we look forward to engaging on the facts.

Thank you. And ladies and gentlemen, this concludes our question-and-answer session. I’d like to turn the conference back over to Greg Heckman for any closing remarks.

Thank you, everyone, for your interest in Bunge. We’re really excited about where we’re at in the stage of the company and the path of growth that we’re on, and we look forward to speaking with you next time. Have a great week.

Thank you, sir. This concludes today’s conference call. We thank you all for attending today’s presentation. You may now disconnect your lines and have a wonderful day.