Bunge Global SA Q1 FY2026 Earnings Call

Good day, and welcome to the Bungie Global First Quarter 2026 Earnings Release and Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1, on a touch-tone phone. To withdraw your question, please press star, then 2. Please note this event is being recorded. I would now like to turn the conference over to Mark Hayden, Investor Relations. Please go ahead.

Thank you, Betsy. And thank you all for joining us this morning for our first quarter 2026 earnings call. Before we get started, I want to let you know that we have slides to accompany our discussion. These can be found at the Investor Center on our website at Bungie.com under Events and Presentations. Reconciliations of our non-GAAP measures to the most directly comparable GAAP financial measure are posted on our website as well. I'd like to direct you to slide two and remind you that today's presentation includes forward-looking statements that reflect Bungie's current view with respect to future events, financial performance, and industry conditions. These forward-looking statements are subject to various risks and uncertainties. Bungie 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, Bungie CEO, and John Neppel, our CFO. I'll now turn the call over to Greg.

Thank you, Mark, and good morning, everyone. I want to start by thanking our team for their hard work and adaptability in what has been a very dynamic start to the year. The first quarter of 2026 was one of the more rapidly changing operating environments we've seen in recent years, and the team executed with the discipline and speed that defines this organization and delivered strong results. Even since our investor day last month, the world has changed considerably. The Middle East conflict, which was just emerging when we gathered in March, has continued to evolve. In addition to the very real impacts to those involved, it has meaningfully disrupted global trade flows, logistics costs, and supply chains. In response, we are taking prudent operational steps to support the continuity of supply for our customers, including working with relevant regulators, policymakers, and partners to preserve essential commodity flows and manage risk. These actions focus on maintaining flexibility in shipping arrangements and leveraging our global capabilities and regional capillarity to continue serving customers reliably. In the U.S., a bright spot in agriculture right now is biofuels. With everything going on in the world at the moment, having more biofuels in the supply is good for everyone. We need policy that supports the sector, and that's exactly what the EPA did with the recent RBO decision. We commend the agency for setting a volume that supports the investments made by fuel producers, oil seed processors, and farmers in supplying biofuels to the market. Globally, there are many variables still at play, not the least of which is the uncertain duration of the Middle East conflict and the impact that we'll have on everything from farmer inputs, including fertilizer, to fuel prices, and what that might mean for the mix of crops farmer's plant in the next growing season. What we can say with confidence is that Bungie's business is designed for complexity and change. Our combination of an integrated global platform, disciplined risk management, and operational excellence allows us to perform through the cycle, and this quarter is clearly evidence of that. Looking at our operating results, the first quarter exceeded our expectations. The higher results were primarily driven by our soybean and soft seed processing and refining segments, reflecting strong execution in a dynamic environment and improved market conditions. To drill down a little deeper, our results underscore the advantages of our larger platform and reach. While grain merchandising performance was impacted by distribution-related factors, including higher logistics and energy costs, those same conditions grow higher demand for renewable feedstocks. This in turn benefited our soy and soft seed value chains. Turning to our outlook, based on what we can see today, including the strength of Q1 and the forward curves as we look at the balance of the year, we are increasing our full year adjusted EPS guidance range to $9 to $9.50, and that's up from the $7.50 to $8 we provided on our fourth quarter call. While the current macroeconomic and geopolitical environments remain uncertain, our balanced footprint and diversified value chains give us the tools to adapt. The long-term fundamentals driving demand for our products and services remain firmly in place, and we're well-positioned to execute in any environment. With that, I'll turn it over to John for a deeper look at our financials and outlook.

Thanks, Greg, and good morning, everyone. Let's turn to the earnings highlights in slide five. A reported first quarter earnings per share was $0.35 compared to $1.48 in the first quarter of 2025. Our reported results include an unfavorable mark-to-market timing difference of $1.28 per share and an unfavorable impact of $0.20 related to Viterra transaction and integration costs. Adjusted EPS was $1.83 in the first quarter versus $1.81 in the prior year. Adjusted segment earnings before interest in taxes for EBIT was $661 million in the quarter versus $406 million last year. In the soybean processing and refining segment, higher results were primarily driven by South America, reflecting stronger processing performance in Argentina and Brazil. North America also delivered higher results across both processing and refining. In the destination value chain, higher origination in Brazil was more than offset by lower processing results in Europe and Asia. And results in global oil's merchandising activities also increased, reflecting strong execution. Higher process volumes were largely attributed to the combined company's expanded production capacity in Argentina. Process volumes were also higher in North America and Brazil. Higher merchandise volumes reflected the combined company's expanded soybean origination footprint. In the soft seed processing and refining segment, results were higher across all regions. In Argentina, results increased in both processing and refining. In North America, higher processing results more than offset slightly lower refining results. In Europe, higher processing and biodiesel results more than offset lower refining results. Origination results in Canada and Australia increased, reflecting our expanded footprint in large crops. Results from global oils merchandising activities also increased, reflecting strong execution. Higher soft seed process volumes primarily reflect the combined company's increased production capacity in Argentina, Canada, and Europe. And higher merchandise volumes were driven by the company's expanded soft seeds origination footprint. For the tropical oils and specialty ingredients segment, higher results in Asia, Europe, and global oils merchandising activities were partially offset by lower results in North America. In the grain merchandising and milling segment, higher results in wheat milling, global cotton, and commercial services were more than offset by lower results in ocean freight, which was impacted by the significant spike in bunker fuel costs. Results in global grains merchandising were in line with the last year. Higher volumes primarily reflect the company's expanded grain handling footprint and capabilities, along with large global grain crops. Prior year results included corn milling, which was divested in 2025. The increase in corporate expenses was primarily driven by the addition of ITERRA. The year-over-year comparison was also impacted by the timing of performance-based compensation and a $15 million cash benefit received in 2025 related to a prior joint venture. Other results were in line with the prior year. Net interest expense of $136 million was up in the quarter compared to last year, reflecting our expanded footprint in merchandising activities.