Good morning, and welcome to the Bunge Global SA Fourth Quarter 2023 Earnings Release and Conference Call. Please note this event is being recorded. I would like now to turn the conference over to Ruth Ann Wisener. Please go ahead.

Thank you, Maria, and thank you for joining us this morning for our fourth 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 Investor Center on our website at bunge.com under Events and Presentations. Reconciliations of non-GAAP measures to the most directly comparable GAAP financial measures 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, and good morning, everyone. 2023 was a significant year for Bunge with both our continued strong financial performance and progress on our long-term strategy. I want to thank the team for their exceptional execution on our day-to-day business while also focusing on key projects for the future. First and foremost, we announced our pending combination with Viterra to create a premier agribusiness solutions company. We received overwhelming shareholder approval and our team has been hard at work planning for successful integration when we close the transaction, which we expect to occur later this year. We continue engaging with relevant authorities in countries around the world as we make progress on regulatory approvals. In addition to the Viterra transaction, we announced the planned acquisition of CJ Selecta, a leading fully integrated manufacturer and exporter of soy-based products in Brazil. We broke ground on our soy protein concentrate plant in Morristown, Indiana, with construction on track for a 2025 commissioning. We also completed the acquisition of a state-of-the-art oil refinery in Avondale, Louisiana. This facility, which has multi-oil capabilities, builds on our ability to provide value-added oils to our food customers in North America, and is already exceeding our initial performance expectations. And in the next few months, we'll be commissioning our new multi-oil refining and packaging plant in India. These growth initiatives will enable us to meet rising demand for plant-based food and feed ingredients. Investments to enhance our existing footprint are also paying off in improved overall performance. Our team continued to execute on planned capital projects, which when combined with our focus on operational excellence, enabled us to reduce oilseed processing unplanned downtime to a historic low, making better use of our capacity directly impacts the bottom line. These investments were also made with an eye towards advancing our work in sustainability. Running our plants more efficiently improves our performance against our science-based targets, and we're committed to continuous improvement of our operations while expanding regenerative agricultural programs and engaging with the industry to do our part to reduce carbon emissions across the entire supply chain. We're proud of our team's many accomplishments in 2023, a year in which Bunge was selected to be part of the S&P 500, a landmark moment for our company and reflective of the work we've accomplished to transform our business over the last several years. Looking at the fourth quarter specifically, we delivered strong adjusted EBIT driven by record results in processing and improved results in milling. During the quarter, we continued to return capital to shareholders through stock repurchases and dividends. Looking ahead, as we've been reminded over the past few years, the only constant is change. Each year brings its own set of challenges and opportunities, and the team has shown we can navigate with agility and speed. Based on the current margin environment and forward curves, the market dynamics in 2024 looks to be different than what we experienced in 2023. And as often the case, forward visibility is limited at this point in the year. For the full year, we expect to generate adjusted EPS of approximately $9. John will go through our forecast in more detail. I want to reiterate that the work we've done to transform Bunge has created a company better equipped to operate in any market environment. And with the combination of Bunge and Viterra, we'll continue to improve our global platform making it more efficient and resilient, allowing us to better serve our customers at both ends of the value chain. I'll hand the call over to John now to walk through our financial results and outlook in more detail and I'll then close with some additional thoughts. John?

Thanks, Greg, and good morning, everyone. Let's turn to the earnings highlights on Slide 5. Our reported fourth quarter earnings per share was $4.18 compared to $2.21 in the fourth quarter of 2022. Our reported results included a positive mark-to-market timing difference of $1.08 per share and a negative impact of $0.60 per share primarily related to acquisition and integration costs associated with our announced business combination with Viterra, as well as a fixed asset impairment charge. Adjusted EPS was $3.70 in the fourth quarter versus $3.24 in the prior year. Full year 2023 earnings per share was $14.87 versus $10.51 in 2022. Adjusted full year EPS was $13.66 versus a record $13.91 in the prior year. Adjusted core segment earnings before interest and taxes, or EBIT, was $881 million in the quarter versus $804 million last year. Agribusiness had a strong close to the year. Processing results in the quarter were up $132 million, primarily related to South America, Europe and Canada, more than offsetting lower results in the U.S., which had a difficult comparison to a particularly strong prior year. Results in Asia were comparable to last year. In Merchandising, results in the quarter were down in all businesses, reflecting lower volatility. Refined and Specialty oils finished a record year with strong fourth quarter results of $212 million. Performance for the quarter was down slightly from last year as higher results in North and South America were more than offset by lower results in Europe and Asia. In Milling, improved results in the quarter were primarily driven by our South American operations, reflecting higher margins due to the combination of lower wheat costs and a more favorable pricing environment. Results in U.S. corn milling also improved. Corporate and Other improved from last year. Higher corporate expenses related to investments and growth initiatives were more than offset by positive results in our captive insurance program and Bunge Ventures. In our non-core Sugar & Bioenergy joint venture, results were lower as higher sugar prices were more than offset by lower ethanol prices. For the quarter, reported income tax expense is $219 million compared to $131 million for the prior year. The increase was primarily due to higher pre-tax income and geographic earnings mix. Adjusting for notable items and mark-to-market timing differences, the full year adjusted effective income tax rate was 23% compared to 17% for the prior year. Net interest expense of $115 million in the quarter was up compared to last year, primarily due to higher interest rates. Also impacting the quarter were foreign currency borrowings in certain countries where interest rates were high. However, the incrementally higher borrowing costs were offset with currency hedges reported within EBIT. Let's turn to Slide 6, where you can see our EPS and EBIT trends adjusted for notable items and timing differences over the past 5 years. The strong performance reflects our team's continued excellent execution in a favorable operating environment, while also delivering on a variety of initiatives to position the company for long-term growth. Slide 7 details our capital allocation. In 2023, we generated approximately $2.5 billion of adjusted funds from operations, which was up by approximately $110 million versus '22's record performance. After allocating $488 million to sustaining CapEx, which includes maintenance, environmental health and safety, we had approximately $2 billion of discretionary cash flow available. Of this amount, we paid $383 million in common dividends, invested $634 million in growth and productivity-related CapEx, which is up significantly from $249 million last year, and repurchased $600 million of Bunge shares, leaving $361 million of retained cash flow for the year. Moving to Slide 8. We finished 2023 with a total CapEx spend of approximately $1.1 billion and expect to invest $1.2 billion to $1.4 billion in 2024. Our sustaining CapEx has been higher, reflecting post-pandemic catch-up and increased investments in operational and reliability where we're already seeing the benefits through reduced unplanned downtime. Also, our discretionary spend is up due to executing on our pipeline of growth projects, many of which are multiyear investments. We expect continued elevated spend in 2025 as we complete these projects. As shown on Slide 9, at year-end Readily Marketable Inventory, or RMI, exceeded our net debt by approximately $3.5 billion. This reflects our use of retained cash flow to fund working capital while reducing debt. Our adjusted leverage ratio, which reflects our adjusted net debt to adjusted EBITDA was 0.2x at the end of the fourth quarter. Slide 10 highlights our liquidity position. At year-end, all $5.7 billion of our committed credit facilities were unused and available. This provides us ample liquidity to manage our ongoing capital needs. Please turn to Slide 11. For the trailing 12 months, adjusted ROIC was 18.4%, well above our RMI adjusted weighted average cost of capital of 7.7%. ROIC was 14.3%, also well above our weighted average cost of capital of 7%. Moving to Slide 12. For the trailing 12 months, we produced discretionary cash flow of approximately $2 billion and a cash flow yield of 18.2%. Please turn to Slide 13 and our 2024 outlook. As Greg mentioned in his remarks, taking into account the current margin environment and forward curves, we expect full year 2024 adjusted EPS of approximately $9. Note that this forecast excludes any pending acquisitions that are expected to close during the year. In Agribusiness, full year results were forecasted to be down from last year's record performance, primarily due to lower results in processing where margins have compressed in most regions. Results in merchandising are forecasted to be down slightly from last year. In Refined and Specialty Oils, full year results are expected to be down from the record prior year, reflecting an environment of increased supply, particularly in the U.S. In Milling, full year results are expected to be up from last year. And in Corporate and Other, full year results were also expected to be up from last year. In Non-core, full year results in our Sugar & Bioenergy joint venture are expected to be down considerably from last year reflecting lower Brazilian ethanol prices. Additionally, the company expects the following for 2024: An adjusted annual effective tax rate in the range of 21% to 25%; net interest expense in the range of $300 million to $330 million; capital expenditures in the range of $1.2 billion to $1.4 billion; and depreciation and amortization of approximately $450 million.

Thanks, John. Before turning to Q&A, I want to offer a few closing thoughts. So we're proud of the work we've done to optimize our business, and we're always looking for ways to drive continuous improvement. We've got a clear set of priorities, to continue that work in 2024 and we're confident that we'll end the year as an even stronger Bunge. We're making great progress towards closing our combination with Viterra, which will increase diversification across assets, geographies, and crops, providing us with more optionality and capability to serve customers. And we continue to invest in our people and global infrastructure. Through effective training and proper tools, we can safely and reliably meet our customers' needs. We're also working on a number of initiatives to best equip our team for the future, including strengthening our digital capabilities. We're making these investments to meet the longer-term demand growth for our products and services. And while always looking for opportunities to improve, we are well positioned to deliver on our critical mission of connecting farmers to consumers to deliver essential food, feed, and fuel to the world. And with that, we'll turn to Q&A.

The first question is from Ben Bienvenu of Stephens.

Over the last several years, there's clearly been building tailwinds for the business. You've capitalized on it very nicely. As we get to this point in the cycle, some of those tailwinds certainly moderate as expressed in your guidance. And you noted, Greg, that as usual, but particularly now there's maybe a little bit less visibility into the business looking forward. If you can think through your business segments, can you help us understand where you feel like you have the most visibility versus the least and some of the key things that you're focused on to maybe gain greater visibility for the year as we move through the year?

Yes, sure. Thanks, Ben. I think as usual, the first quarter is where we have the most visibility and then it starts to kind of reduce as we go out. Having the global platform, of course, is very helpful. And so as we look across crush today and as we said and we look at the curves and what they give us, they're all inverted with some pretty limited liquidity beyond Q1. And then, we're in that transition as markets get a little more balanced on supply and demand, that producers generally don't like selling lower prices, and they've got room to store. So you see a little bit generally of reluctant selling as we transition from the farmer. And then the end consumer, we see them having an incentive to wait. So they're becoming also more short purchased and buying in the spot as prices are balancing and the supply chain is not quite as tight. So those are some of the key things that we'll watch that, of course, affect both crush and merch and our Refined and Specialty Oil, and Milling altogether.

Okay. Very good. My second question is related to a similar dynamic as we kind of have shifting winds in the cycle, operationally, organizationally, tactically, you all have positioned the business to maximize earnings power as the cycle was accelerating to the upside over the last number of years. Externally, you've done a masterful job of managing expectations, and I think your track record of guiding conservatively is well established at this point. As we get to a slightly different backdrop, how does your focus internally change, if at all? How do the changes that you've made historically position you to also maximize earnings power as we see more balanced supply/demand? And then how, if at all, does your external expectation management change in this sort of environment, if at all, versus what we've seen in the last several years?

I would like to emphasize that our focus has consistently proven effective in all market conditions. We have aimed to prepare the company for the lowest points in the cycle, even though we hope never to experience such lows. With this mindset, we ensure our costs are positioned for optimal efficiency no matter the market cycle. Our operating model is designed to be agile and responsive to external factors beyond our control. We also ensure our reward systems align with the interests of our stakeholders, investors, and customers throughout the value chain. Our operations remain consistent in areas we can influence. It's important to remember that we are part of a large global infrastructure for feed, food, and fuel, which serves our customers. We maintain significant assets, a broad customer base, and substantial physical flows, all of which create inherent opportunities. While market conditions are outside our control, we manage our daily operations effectively. Our focus remains on what we can influence, allowing us to unlock value and balance supply and demand for our customers across the entire value chain. This dedication is a daily priority for us.

Congrats on a very strong quarter. You came in well ahead of expectations. So congrats on that. My question here is it's more of a help if you could provide, you have a $9 guidance for 2024, which we think is conservative. But help us understand if Viterra does close on, let's say, July 1, then where could this $9 go based on the current environment? Whatever help you could provide would be highly appreciated.

Sure, Manav. This is John. I think what we've communicated in the past, I think, our view is on Viterra close in 2024 will be mildly accretive to flat. In the first year, we've got a lot of synergy costs, a lot of integration costs to incur. And certainly for the first 6 to 12 months, there'll be a lot of work around integration and focus on that. I think we love the business, and I think the long term is outstanding, especially when you look at an environment like we're going into. But I wouldn't expect a significant impact on the $9 in this year.

I might add, the one thing that we have spoken about is how the businesses are so different with us being much stronger in the processing and then much stronger in the origination, storage, handling, and distribution. So if you do have a market that moves more into a contango or a carry, that does benefit where you have more storage. So I think that when we talk about the diversification and the crops we handle and in the asset footprints and the geographies, that would be one of the things that we'd be thinking about depending on when we close and what the environment looks like when we talk about the outlook at those times.

My quick follow-up here is it looks like the discretionary CapEx for 2024 is going to probably be somewhere between $720 million to $840 million. Help us understand where this money is being spent, the kind of returns? And when do we start seeing these projects come online, so we can start giving you the benefit of earnings associated with this CapEx?

Sure. Over the last two years, we have initiated several significant multiyear projects. These include our collaboration with Chevron, our facility in Amsterdam, and the new specialty proteins facility in Indiana. Our plant in India is also part of this, but it will be operational later this year. Most of these projects will remain in the build-out phase until 2025, and we anticipate they will begin contributing in 2026. We generally aim for a mid-teens return on our projects, with some variations. Regarding M&A, we are looking to finalize the acquisition of CJ Selecta later this year, which should provide immediate benefits once completed. However, we do not expect significant contributions from this in 2025 due to the timing of its launch and the necessary commissioning period. Most contributions from this acquisition are also expected to begin in 2026. Additionally, we are exploring numerous smaller acquisition opportunities that we will keep you updated on.

Just want to congratulate from my side.

Thank you.

Just two ones to follow up. So one actually associated a little bit with the M&A and the contribution of it, capital allocation in general. Can you just maybe frame to the audience how you think about the buyback left over for the Viterra deal? Because if I remember right, you said you wanted to have done about half of it, of the $2 billion that was announced until the close. So that would leave you with, I guess, some around about $400 million. Just that we can think about, is that something you target for in the first half?

We'll start with share buyback. Our expectation is to execute the $400 million in the first half of the year, and we are committed to completing at least that amount by the close of the transaction. We anticipate doing that and will see how things progress from there. Regarding our outlook for 2026 and reaching $11, we remain very optimistic and believe we are on track. Although the capital expenditures may have experienced some delays due to timing, we have picked up the pace on the M&A front. We feel confident about our trajectory toward exceeding $11 by 2026 and have no reason to adjust our outlook at this time.

Okay. Perfect. And then a quick follow-up. As we think about the guidance for this year and maybe the magnitude of changes that you're foreseeing right now? I know and Ben brought this up early on about the visibility, and I know about the challenges Q2 onwards. But as you look at it today, where do you think the biggest downside versus 2023 is within, call it, maybe a key for processing merchandising and Refined and Specialty Oils?

I think, if you look at the big flags, the big put and takes that we're thinking about at the highest level, of course, the geopolitical and weather right? And so while we're getting a more balanced S&D situation globally, we're kind of one weather event from really tightening things up and that could bring some volatility back. And then the other offset is around it at a high level, if you think about demand. And so lower prices should spur more demand. That's what we've seen historically, and then it's really how quickly we see that. And even if you take an anecdote on the food side, we're seeing all of our food customers' innovation projects, which had spent the last 2 years being cost reduction type programs are now really focused on growth. So product development, new products, and line extensions. And then you take the kind of under that umbrella, some of the big drivers, of course, it's the veg oil, S&D in North America, because as we saw it play out in '23, and it will continue in '24. We've got a new industry with new demand building. The market is doing its work, supply is adjusting. And it can be pretty sensitive to that oil pipeline, veg oil prices in North America, which, of course, is very sensitive to the crush margins in North America. And the other, of course, is Argentina, where you've got a weather situation there much better than last year where bean production should maybe be double what last year was and you've got a new government in place. And so how their policies and incentives play out. I think that's a big one to watch. And then, of course, you always have to think about China not only their economy and how it develops the macro just from an overall demand and then, of course, how they think about stocks building. So I think those are the kind of the big flags that we think about. Right now, if you look at the curves and the outlook, people aren't predicting much disruption at this point.

Continuing with that line of questioning, if we consider the approximately $9 EPS, it suggests a year-on-year reduction of about $1 billion in segment profit. Could you provide some clarity on which segments this is occurring in? It seems likely that merchandising processing is the biggest contributor, but could you also outline the expected year-on-year declines for Refined Specialty Oils and Sugar to give better context to the decline in processing? I have a follow-up after that.

Yes, Adam, this is John. I think there are really 3 big drivers to the year-over-year change. And the largest is what we're assuming on the processing side, certainly globally. That's probably I'd say close to 80% of the variance. When you look at the gross variance, we have some things that are going to be up, we expect to be up. But that's a big piece of it. And then the other big drivers are so Refined Specialty Oils being down from probably a couple of hundred million from where we finished this year in 2024. And then the other one is Sugar, we're calling down given ethanol prices and the environment in Brazil. But then we have some other things going in the other direction to ultimately get to the change. But certainly, the largest is the Processing segment at this point.

That's helpful. So within Processing, if it's around 80%, that suggests a global crush margin decline of approximately $15 to $20 per ton lower across your footprint. Can you clarify which regions face a more significant headwind and how North American crush and soy meal, along with Argentina's return to the export market in the second quarter, influence the regional balance of your network?

Yes, let me start by saying that we expect soft seeds to remain strong but slightly down compared to 2023. This is particularly true in Europe and North America. Soy is the major focus as you've pointed out, and overall, we anticipate a softer market. In examining the regions, Argentina, which was a drag last year, is expected to improve as we enter harvesting season in Q2, leading to an increase in crush there. The impact of government policies and how farmers market their products will be crucial. Meanwhile, Brazil continues to show strength in new crops, although farmer liquidity is slower there. In the EU, demand for meal is strong, but the market is also experiencing an inverted curve. In the U.S., Q1 looks good, but we expect the curves to weaken in Q2 and Q3, with better prospects for Q4 as new crops come in. Farmer selling is slower across all regions, as they are hesitant until the market stabilizes and a clear direction emerges.

If I could just come back to the guidance for '24 real quick. I was hoping maybe you could just give a bit more color on how you see that maybe phasing out over the course of the year. I would imagine that 1Q maybe has some favorability in it still from the back half of 2024. So I know you don't give quarterly guidance, but if you can maybe help size like your expectations for the first quarter versus the balance of the year, that would be helpful.

Yes. Steven, this is John. we're looking today, when we look forward at our forecast, we're expecting it to be pretty closely balanced between the first half and second half, actually, pretty close to 50-50. And I would say, waiting on the first half of the year, more 60-40, and on the back half of the year kind of the mirror image more of a 40-60. That's kind of how we're seeing the year at this point.

Okay. And then maybe just another quick follow-up on the back half and what you're kind of assuming for the size of the U.S. crop and how to think about maybe what some of the different scenarios are there. I think you alluded to 4Q being a little bit better because of the U.S. crop, but maybe if we have a larger-than-expected crop in the back half, like what do you think that would mean for the outlook that you've currently laid out?

Yes. I'd say if you look kind of at a high level, right, we get the Brazil crop coming in probably the bean production being in the mid-150s. And that's versus last year, we were around 160 million metric tons. I mentioned Argentina being production to be around 50 million tons there, which is about double what it was last year. And then I think as that sorts out and the market sends the right signals, we'll see how the acres work here in North America, right, and how many bean acres that we end up with and how the growing season plays itself out. But we do need to have a good growing season here in North America, but have no reason right now to plan on anything else.

Yes. The first question I'd like to ask is about the guidance. I know you have mentioned several times that the forward curves for crush margins are mostly inverted. I understand that this is how you project the outlook. However, if we were to revisit this discussion in six months, do you believe the crush margins will actually remain that low? Given that liquidity is tied to the forward curve, is there a possibility that things might change and the outlook for the year could improve?

Well, I think that's why we've been consistent about using the forward curves and what we currently see in the environment when we do give the outlook because that way, it kind of doesn't fluctuate depending on our forecasting of what we see in the markets and versus what the public forecasters are saying they see in the market. But that's why I do think those flags that we've called out, right? Weather is always key how that farmer is going to market, the marketing pattern, and how much on-farm storage that they've got to affect that, and how their financial condition is from a liquidity standpoint. And then the big demand drivers, right, as we talked about, how quickly does demand bounce back on the food side, which is the one we can see snap back pretty quickly. And on feed, it looks like animal numbers are roughly flat. The chicken's probably up a little bit. Pork might be down a little bit globally. But so the animals are still in place and how quick do they add animals from a demand standpoint. As that profitability has returned in the animal sector, I think they've seen the worst on their profitability is in industry. And then this veg oil market is pretty sensitive. If you look globally, palm is not increasing at the production growth that it had historically. And at the same time, they're adding domestic biofuel demand globally on the palm side. So oil tightening up somewhat from a global perspective, while you are growing biofuels in general, renewable diesel specifically and SAF kind of to come in the future. So you've got a new industry that's trying to decarbonize its liquid fuels because we can do that with vegetable oils, low-CI feedstocks, and help them do it at scale. And the market has been sending that signal that we can supply those feedstocks, and we've seen quite a bit of demand that will be coming on in that segment. And so that oil leg can really affect the crush and that's why we call that flag out, and that will be a key one to watch as well. So it should be a really interesting 12-, 18-month kind of transition here, not only on the crops but as demand continues to grow as well and as customers kind of move back to trying to drive growth versus cost savings.

The second question is regarding merchandising specifically. In Q2 and Q3, the performance was fairly balanced when looking at the $75 million to $100 million EBITDA you reported in normalized earnings, but Q4 fell significantly short of that. Would you say we are currently in a phase of the Ag cycle where merchandising will be below that normalized level, or do you think we are still in the middle of the cycle and that Q4 was just an outlier?

I believe merchandising should be slightly down in 2024 compared to 2023, and it is likely below our baseline model at the moment. However, forecasting merchandising is quite challenging, as it is the first area to respond to any policy changes affecting flows or weather-related issues that impact production. As we continue to achieve more yield from the same acreage while experiencing increasingly volatile weather patterns, both dry and wet, this is likely to lead to greater long-term volatility. Therefore, merchandising will be the aspect that adjusts to short-term changes.

I wanted to ask a little more on the demand pull you're seeing from renewable diesel. I mean, it really has been a kind of key driver over the last couple of years in terms of crushing refined oil. The industry, obviously, responding on the crush side with added capacity in part to support this industry. I guess, what's the visibility in terms of that demand pull at this point in terms of absorbing some of this increased supply that's coming from the added crush capacity? Are we still a little bit in waiting mode? At different points, you've kind of noted that maybe curves aren't showing it, but you are at least in touch with customers who are showing optionality for that increased demand pull on a forward basis?

Yes. We see it continue to grow. I think there's going to be another 1.4 billion gallons of RD capacity come online in the first half of '24. I think some of the complexity, right, is it isn't just a veg oil game as they grow their demand. The market sent some signals when the pipelines got tight. And so we saw UCO imports. And so as we balance some of that supply and demand understanding did we soak up some surpluses and what will be the ongoing rate of some of these imported UCOs and other kind of low-CI feedstocks as the market kind of works to balance itself out as that demand comes on. So it's a bit of no doubt, a complicated picture on that. And then, of course, you've got policy changing, right? As we move from a blender's credit to a producer's credit in '25 and their end markets adjust to that. And then, of course, you've got even things like the card policy where they've signaled that they've got the ability to make changes if the feedstock is available. And now the market is sending signs that the feedstock is available. So we think this will be pretty dynamic. But net-net, we have increased demand that continues to grow globally, and then we'll see what other policy things happen generally kind of around the world and specifically around things like SAF.

Yes, absolutely. Regarding the share repurchase plans, as of the October earnings call, you've allocated $134 million towards repurchases, bringing your total to around $600 million for the second half of the year. Looking ahead to this coming year, should we anticipate a more balanced approach since it seems you paused your activity over the last couple of months in 2023, even though you still have significant plans in place before the Viterra deal closes? Should we expect a more steady pace for repurchases?

Yes. Our expectation is that between now and midyear, we will secure the remaining $400 million, although the timing for the Viterra closure is still to be determined. However, we won't wait for that news. We plan to maintain a pace that ensures we complete everything by midyear.

My question is on refining because it seems like that's the segment where the commodity headwinds are probably the most visible, but it sounds like there's a technology story there for you where you're either gaining share or maybe potentially getting some pricing power. And I wonder if you could just talk about the attributes of the yields in the new refineries that are adding value and how they accrue to the segment growth? And how should we think about that contribution?

I think on an overall, it's just the team has been running the refineries better. We set some records there in Q4 on volume and capacity utilization in our refineries. So we're just trying to run the system better to meet the demands. And then on our India refinery, that is new multi-oil capabilities as well as packaging, and that's to meet some current demand as well as some growth. We'll be commissioning that in the first half. That's for our Foods business. And then the Avondale refinery, which we bought here in Louisiana, that's really helping on the import of some of the tropical and soft oils to serve our customers with multi oil. And we were really at capacity there in serving our food customers here in North America. So that's freed up capacity and given us some extra capabilities and we also had some equipment headed for another facility that we've already pointed at Avondale, and we're going to expand that facility already. So we'll be doing that work during the year. So that's really about capabilities and flexibility on the food side, which is the other, as John talked about, a little farther out, but our Amsterdam facility will be kind of the same thing. That's a great specialty oils market over there. We'll have really the most flexibility we think in Europe, we'll have the best carbon footprint and the lowest cost facility when we get that done, but that's just getting underway. So that will be out in '26 before we have the benefits of that. But also with these new facilities, they're all improving the carbon footprint versus the facilities that we were running before. So we continue to focus on sustainability as we make those investments as well.

Yes, Sam, I would add that food is still 75% to 80% of our volume on refined oil. So while energy certainly has been a nice demand for us, food is a big focus. We have very big downstream customers, and they depend on us from a traceability sustainability standpoint and to be able to provide a multi oil. So that's still the primary focus of that RS&O segment. Yes. The reality is that most of the projects in our growth pipeline are already in progress. Therefore, the majority will remain unchanged, as we still believe they are excellent long-term projects. Of course, there may be some adjustments as new opportunities arise, which could involve a trade-off between those and mergers and acquisitions, where we have already engaged in some activities. We have identified several promising bolt-on M&A opportunities and have allocated some capital in that direction. However, I would say that our outlook for 2024 and 2025 is largely established from a capital expenditure perspective.

Just one for me. I was curious about the cost structure for Processing and RS&O. Maybe just how this has evolved as new capacity has come online in the industry? And maybe any comments if you guys could give on variable cost changes over the last few years and how your cost structure compares to competitors would be helpful.

Sure, this is John. We haven't been unaffected by the inflation we've experienced in recent years, which began during COVID and continued. However, we've noticed a significant drop in energy prices recently, particularly in Europe, leading to a reduction in our variable costs there. We believe we are likely among the most efficient in the industry, definitely comparable to others. As expected, higher costs generally stem from the U.S. due to inflation and Europe because of energy prices and inflation. Nonetheless, we have several low-cost production regions, with Brazil being one where costs are significantly below average, as well as in Asia, which is very competitive. Overall, we've noticed costs decrease, and a lot of our recent capital focus has been on improving efficiencies at our plants. We are confident in our ability to mitigate some of the inflation we are encountering. Therefore, we feel quite positive about our current efficiency levels.

I was hoping you could compare the current environment in the curves to the $8.50 EPS assumptions in the baseline more broadly. It seems that most of the profitability and margin structures are similar to those assumptions, especially on the crush side, if you were able to lock in the first quarter a little higher. The exceptions may be a bit weaker on merchandising. If the couple of hundred million lower unrefined oils is accurate, and considering the buyback, the math would suggest something like $10 plus. I understand the volatility of the environment, but am I thinking about that correctly? Is there anything else that is materially weaker than the baseline assumptions?

I can begin, and Greg can add to it. Currently, our margin assumptions for 2024 are slightly improved compared to the $8.50 baseline we had previously. We anticipate this will remain stable or possibly get better throughout the year. However, we are observing some weaknesses, primarily in merchandising, as Greg mentioned. There's limited visibility in that area moving forward. As we concluded 2023, we decided to maintain a conservative forecast for 2024, which is actually lower than our baseline. Conversely, RS&O has seen an increase. In terms of the commercial aspects, these are the significant factors to consider. On the non-business side, interest expenses are notably higher than our baseline due to rising interest rates, along with a slightly increased effective tax rate as we adapt to global tax legislation changes. Overall, interest and taxes are elevated, while margins for soy and soft products are trending higher, and merchandising is on the decline. That summarizes my perspective.

The only point we didn't cover on the commercial side is that while the margins on crush are slightly higher than the baseline, the volume is a bit lower. This is largely because we've chosen to exit Russia, and our volume in Ukraine has decreased due to the ongoing war there.

Yes. And maybe just one other thing to add, too. As you're thinking through this share buyback, certainly as we've done more of that than we had in our original baseline model, I think we modeled $250 million a year in our baseline assumption, and we of course, we've accelerated that with the Viterra transaction coming.

Yes. I think, probably the same key ones, China, always a big factor their economy and if it would speed up from a demand and then how China is going to think about any stock building because they can definitely make it change on these markets that are really still pretty close in the supply and demand balance, any type of weather situation at all. The balance sheets are pretty tight. We could see increased volatility, and that would also probably drive not only more farmer selling, but it would also drive the consumers to be further out on the curve and do more purchasing and they've gotten comfortable again where we had some just in case inventory building. Everyone's kind of forgotten the supply chain problems, and we've definitely seen customers pulling down stocks in that just-in-time inventory again. So if you saw any concern on S&Ds or supply chain problems and saw a build back that way. The overall growth in demand from the lower prices, whether that's the animal industry adding capacity and/or the consumer responding across feed, food or fuel more quickly to the lower prices. And then Argentina always a very big driver, of course, in the size of their crop, how the farmer is going to commercialize that. And of course, a lot of that will be driven by the government policy and their ability to put the incentives out there in the way they want to with what they're trying to accomplish. And then, of course, importantly, biofuels in general, globally, how that continues to develop policy and how the different feedstocks are weighing off in the global oil balance, we're keeping palm in mind as well. So those are a few of the flags that we're watching carefully, and it should be a really interesting 12 months, 18 months here going forward as we have a number of things transitioning.

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

I'd like to thank everyone for joining us today and for your interest. And I guess I'd just like to wrap up by saying we've tried to reflect in our outlook what has changed for '24, but I sure want to also reflect what has not changed. And what hasn't changed, right, is there's long-term growth in demand for the things we make and the services that we provide with them, and that is across all 3 food, feed and fuel markets. The growth in biofuels, that's a near-term issue, and that trend is in place. The improvements in our operating model, those continue and we'll continue to focus on how to make sure that we don't stop with our focus on continuous improvement. Our '26 baseline target remains unchanged. We continue to have a great pipeline of projects and investments with good returns. Our pending acquisitions are on track and our share purchase commitment is ongoing. So those are things that haven't changed. We feel good about what we're doing. Very proud of our team, and we'll continue to stay focused. So thanks for your interest. Look forward to speaking to you again soon. Have a great day.

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