Bunge Global SA (BG) September 2026 Conference Transcript

All right. Perfect. So welcome back. Next on stage, we're pleased to have Bungie's management team with us after missing out for a couple of years, given the Viterra transaction in the past. Now, with us today, Greg Heckman, company's CEO, as well as John Nappel, Bungie's CFO. And with no further ado, let's get into it on the questions. Now, maybe starting with the broader landscape, obviously ongoing conflict, Middle East and the Black Sea regions, we're seeing shift in global trade dynamics as well as weather concerns, which might be drought in Europe, the Super El Nino. There's a lot of uncertainty, which seems to be the new normal. Now, how does the addition of Viterra make Bungie better positioned to navigate such volatility and actually continue to deliver for customers and shareholders?

Thanks for having us today. Great to be here again. Great to be on stage again with you. It really has helped us in every way. I think there's been no better capabilities added for our risk management, for our customers, both the farmers and the consumers of feed, food, and fuel, than the diversification that we got with the merger, with the combination of Viterra and Bungie, because we are now in every key producing region. We touch more farmers directly than anyone else. This gave us not only the diversification across geography, but we now have the diversification across grains and oil seeds that we need to serve our customers. So whether it's the challenge that you mentioned on whether it's trade war, the actual wars, weather issues, we just have more origins, more destinations, a better, more complete team in order to be able to solve those problems.

Okay. So as we take that and maybe look into the second half and your adjusted EPS outlook, which was slightly erased during the second quarter call, what gave you the confidence in terms of the EPS uptick, and where do you see the biggest factors that could drive maybe reaching the higher end of it, and what are the risks for, you would say, this could be then the lower end? Do you want to start?

Yeah, I can start, sure. So, look, we had, as we got through Q2, we looked at the balance of the year. Number one is we felt very good about where we performed up through the first half. And so I think we felt like we had some good momentum in the business. We looked ahead at the balance of the year, and we saw, you know, good S&D drivers. Ultimately, you know, RVO clarity hadn't been totally resolved yet, but we felt like the industry was ramping up, and there was good demand for soybean oil. There was good demand for meal. We saw, you know, improving results in various places in the world, and I think the resilience of our team and how they looked at the balance of the year, even though maybe a little bit less clarity and visibility into Q4, we felt like Q3 was largely locked at that point and, you know, saw a path to get to the number we gave, the 925 to 975 range. And so, yeah, I think, you know, really I think a lot of it had to do with what we felt like the range of likely outcomes for the balance of the year we felt pretty good about where we were.

I think it's also, you know, worth noting we just passed a year in July since closing the transaction. And, you know, while it took a couple years to get through regulatory, which was, you know, very helpful for the integration planning, and I think it's helped the integration go so smooth, but remember, the commercial teams couldn't start to work on commercial synergies, start thinking about optimizing the footprint, making sure that we had the right people in the right roles until we closed the transaction. So we've been doing that work for the last year, and so also as we've gotten some of the reps together with the team in a challenging environment, also you remember, you know, Vitero was private, and so forecasting not as important as for a public company. So as we brought the teams together and the systems and processes and began to do that work, that's also been helpful in giving us visibility and confidence in going forward. Okay.

So sticking to that, and obviously a big driver of results right now, is a fairly strong setup in soybean processing. So you've laid out earlier in the year that $45, $47 crush margin as a mid-cycle assumption. How sensitive is actually that level for biofuel policy versus just underlying food fuel demand without policy? and where would you say we're shaking out right now compared to that baseline assumption?

Yeah, I can start, Greg. Yeah, you know, it was somewhat of a, the first thing is a 45 to 47 sort of a framework that we built, you know, thinking about history. We looked back five years. What were the dynamics? We saw highs and lows in a five-year period. So we looked at averages and said, okay, in all the regions we operate globally, what were the dynamics during that five-year period and what do we feel like probably was, as best we could figure out, kind of a normalized level of margin. And then looking forward, you know, what did we expect structurally? Was there an inherent change in a given geography that might drive a structural change going forward? And as well, we looked at our VO policy and everything else, and we kind of came up with what we felt like in each region was ultimately a likely ongoing average margin, also to where would it need to be to provide the right return on assets to incent expansion if it was needed at some point. So we look at all these factors, a little bit of art, a little bit of science. We plug that into the model, and then obviously a big piece of that or a portion that can impact that is certainly the policy around RVO, biofuel policy in general globally. I think today we look at it in the U.S., and what's come out recently is certainly performing above what we consider kind of that average baseline. We're above that in the U.S. and Canada, for example, but there's parts of the world where we're below it. So today on weighted average, we feel pretty good about kind of where we're there. In total, just the pieces are a little bit different than maybe how we modeled it. But again, those are going to change, continue to change. But I think we feel like that's a pretty good guideline for how we think about it going forward.

Probably one of the other important things when we were modeling going forward and what was different. I mean, when you think about Bungi pre-Viterra, we were the largest global oil seed crusher, but we were really underrepresented in Argentina. In Viterra, they had the largest, lowest-cost soy-crushing facility sitting in Argentina, Renova, but they were running it really on kind of an island. We were able to plug that into our global system, and now as we do our analysis and we're looking where we commit crush and we're running our global soy crush origination, processing, refining, and distribution system, we're able to run our value chains end-to-end with Argentina in there. And, of course, as we all know, the business environment and the direction that the farmer has gotten, Argentina has continued to improve overall. And now, with bringing balance to our overall global soil system, it's been great. Yeah.

Just real quick following up on, you've mentioned it early on with the RVOs, and clearly that kind of like is a different environment now because we just got the biofuel clarity, which is very much necessary. We saw recently, just about a week ago, the SRE changes, so maybe help us understand a little bit what the exemptions mean in general and how it impacts the biofuel policy for this year and next year, just broadly industry, but also for you guys in more particular.

Well, certainly as an industry and as I'll say a partner of the farmer, because we spend a lot of time working with the farm groups and our industry groups, you know, together we didn't want to see any more SREs in what were assumed to be, you know, to be granted back when EPA first modeled this. But ultimately, so we lobbied hard against increased SREs because we didn't feel like they were good for the farmer and really in the spirit of where we were headed. But ultimately, they were granted, but through a lot of work and conversation and, you know, with our industry groups, with the right representatives that we have and the farmer groups, we were able to get all those reallocated. The administration agreed to reallocate those to 26 and 27, which in effect kind of undoes a lot of the SREs that were granted. So for us and for the farmers and for our industry, it gives certainty that there's still commitment there to the policy, and it keeps those levels at where the industry is now operating at full capacity and allows us with certainty, not only us but the renewable diesel producers, to go ahead and operate and run hard. So it was pretty critical, and we're very pleased with where we are today. Now we've got to get it finalized, and then it's on to 28 and 29 in set three. So work never stops.

So switching from soybeans to the soft seed part of the equation, which obviously has also done fairly well in recent quarters, and you have pretty solid expectations for the second half. How much is here really structural changes and just global oil demand versus maybe what are temporary factors like soil disruption in the Black Sea, those relatively tight sunflower supplies, and just geopolitical issues all over? What is it like structural? What's more temporal?

I'd start by, you know, again, talking about the combination. a lot of this is structural because while we had a good soft seed crushing platform at Bungie Viterra had a real nice soft seed crushing but their soft seed origination is excellent and so as we were able to bring both the canola rapeseed and the sun seed crushing together it gave us not only the diversification of having sun seed in Argentina and the Black Sea and being able to serve those customers year-round and deal with any disruptions. It gave us more balance on canola and rapeseed. But the origination capabilities, now we have the full chain much more, I would say, much more similar to in soy, where we have the full scale of the origination to not only serve our crushing facilities and then being prepared for the refining and the distribution, but also being able to serve the industry. And in a world where it is very complex, that's been really key to our soft crush.

So you've also talked about it recently that there might be some trade normalization between China and Australia as well as just global canola flows might be changing. So how should investors think about the earnings opportunity created by that fully integrated origination processing footprint that you now bring within it, Canada, Australia, Europe, when these trade patterns shift? So what does that, how does the Bungie platform leverage that?

Yeah, when the canola seed couldn't go to China, out of Canada, some of that we then moved to Europe. Of course, we crushed as hard as we could in-country. As you see that shift and we're able to move Australia to China again, having that destination open to both origins, we can then drive that off of the economics. But again, where Australia serves it, if that seed needs to stay home in Canada, then our crushing is there to not only take advantage of that, but then it opens our ports up to handle more wheat or barley. So I think it's just the diversification, again, among the footprint between what needs to stay at home in each of these markets to be consumed versus what needs to be exported. And that's the granularity and capillarity that we now have globally at origin and at destination to be able to get the farmer to market when they want to get to market and to be able to hedge those end consumers when they want to hedge.

So if you look at your soybean and your soft seed processing businesses, Are there areas where you see still opportunities to further invest, to further grow the business, and what would be kind of like return criteria if you were to deploy capital, just to continue leverage what you have there? Are there missing, are there some blank spots still that you would like to explore, or do you think you're at the sweet spot already?

Look, we've got the critical mass and the balance we needed. That being said, and I'll let John talk to the return standards, That being said, we'll continue to look where an asset or a small business may make sense, and we can bolt it on because we've got, frankly, network synergies that others may not be able to make the same returns that we can. We'll want to go ahead and, you know, protect our most valuable franchises, and some of those areas where we think we could be stronger, we'll be looking to expand those. You know, the first thing we always want to do is acquisition and not add capacity, and we'll continue to de-bottleneck where it makes sense. That's our, you know, cheapest, you know, investment per dollar of capacity. So that's the highest returning. But we'll continue to be optimistic but disciplined and targeted.

Yeah, and, well, maybe just to touch on, you know, the one big expansion project that we did put in the crush site was Industrihan in partnership with Chevron for a very specific purpose. And that's ultimately to build switch capability to process novel seeds ultimately. We'll start with soy, but ultimately process novel seeds for input into the renewable diesel production. So that was a very specific reason why we expanded there. You know, and as Greg said, going forward, I think we would look opportunistically at capacity consolidation kind of thing. I don't necessarily see another big mega project like that down the road, certainly not in the near future. But ultimately, when we look at returns, it's got to be, you know, a double-digit return for us. That's kind of our minimum standard. So, you know, the opportunity has to be there, and then it has to make economic sense for us to do it.

And I think that's a great example of flexing the network, right? It made sense to really basically double-dest your hand on the crush side and to do it with a great partner like Chevron. And we want to be the partner of choice, whether it's feed, food, fuel, or the farmer. But that also gave us the opportunity on the 100% bungio to increase our barge unloading capability, not only to serve the plant, whether we're going to crush soy or winter canola or, as John said, novel seeds eventually, but also to export the meal.

But that capacity, if it's needed then for grains, whether it's corn or wheat or barley, whatever, what are the other grains, we've got that additional capacity in the Gulf, and it was essentially done on a site that already had the infrastructure there.

So from a cost, it really, really makes sense. Thank you.

Got it. Leaving that part behind and moving on to grain merchandising and milling, because that's obviously something back earlier in the year, you've called out $800 million as normalized earnings levels, so kind of like a mid-cycle here. but there seems to be a little bit of an oversupply in the segment so what would you say needs to change to kind of like get the earnings up to what is mid-cycle? Where are the missing pieces or where's the opportunity?

The merch business if you think that was Viterra had a much bigger footprint than we did at Bungie especially in wheat and in the feed grains, wheat, barley, corn So, again, the teams couldn't work on that until closed. So as we've been bringing the teams together, bringing the assets together, there's definitely not only optimizing the flows that we have, but then looking at the customer set. And where we may have had someone that we were the primary meal supplier but didn't have the ability at Bungie to serve them on the feed grains, we're now able to have completely different conversations with that customer, be very strategic and grow with some of the fastest-growing global customers and really change that dialogue, whether we're helping them with budgeting, helping them manage logistics or inventories, or if we're doing things on the supply chain to provide them deforestation-free. Soy, if they want regenerative ag on the feed grain side, and then to track that all the way through the value chain. So we're able to wrap that with some services as well. So the complete package will partially be running it better the same way, but also then growing with customers and adding some services. And then ultimately it will be about environment and seeing the environment improve. We had heavy supply and demand balance for quite a while in the feed grains. That looks like that's starting to change. Some of that on yield, some of that where the challenges on nutrients because of the Gulf War, where you saw some shift in what the farmer planted. And then we've got now some of the supply trapped in Russia and Ukraine as some of those ports and ships have been targeted. We're seeing less shipping availability there than since the beginning of the war. and that's going to call on some of the other origins around the world, Australia and Canada, and some of that to serve those end users. So we're seeing things start to tighten up, and then, of course, El Nino and watching how that may develop is also going to be key to watch. So one's the things we can control and then being prepared for those that we can't.

Within that, I think you currently source a little over half directly grains from farmers, but you target more like a two-thirds of it over time, what would be the advantages of achieving that target? How does that improve the financials of the business?

Number one is helping the farmer be successful. We need the farmers to be profitable. We need them to be expanding. We need those communities to be healthy. So the more that we can acquire directly from the farmer, the more that we can send the signals all the way from when they make the planting decision to when they want a market that works for them to manage their risk, the better we can do on touching being the first touch, that then whether we're going to end up processing that or shipping it to a certain market, it hasn't been blended down by someone else touching it, so we have more optionality, if you will, on the decisions of where that can go to manage the quality. And a lot of the focus, if you think about, as we brought Viteria together, they were originating to serve a marketplace. Well, when you look at Viteria and Bungie together, you want to start with your highest margin, most important processing assets and make sure that you've expanded that drawing arc and that you're using all the assets there and to source directly and get the highest share of the origination that you should be to serve your assets. So it's very important to us, and we want to have those relationships. As we say, the land that doesn't move, the origination assets don't move, the processing assets don't move. So you want to have that relationship and make sure that you're connecting those value chains where you should.

Wrapping up on the sectors, tropical oils, specialty ingredients, you've highlighted the new Amsterdam Tropical Oil Refinery and the Fracturation Facility as a major project that's going to come online in 2027. So what portion of the earnings uplift comes from volume growth mix versus, like, operational efficiencies from that as we move into next year? Because if I remember right, you had, like, a little bit of these, like, in-flight projects, and this is one of them. So maybe give us a little bit of a direction how to think about this for 2027.

Yeah, look, I think the project was really done for two reasons. One is to be able to provide additional offerings and capability that we didn't have previously. And the second one is to become a low-cost producer in Europe. We are consolidating two plants into that operation, effectively. One has been transitioning as we speak, and as soon as we're up and running and throughout 27, we'll be transitioning the activity from another plant. So it's really about driving customer offerings and becoming more efficient. And so we're pretty excited about it. You know, it's been a long time coming, But the fact that we're running oil through the pipes today is a good sign, and the team's excited. Customers have been, you know, coming to visit, and I think a lot of it now from this point forward is going to be customer qualification and getting them up to speed on the capability. But, you know, we see that as a flagship asset for us going forward in Europe.

And John said it, but I think it's worth saying again, we end up running one facility instead of two. We've got more capabilities, a lower cost footprint, and it's serving high-value customers with our lowest carbon footprint of any facility.

Within that segment, you also have the combination of the Morristown Soy Protein Concentrate Facility and the IFF protein business, which was acquired. So what are the milestones you're monitoring here to determine, like just return rates and growth, and how is that combination coming along?

Of course, the integration, bringing the teams together, the onboarding, bringing the customer focus together. So we've got some ongoing customer business. But then as we commercialize that plant, going through all the approvals, It takes a little longer with the food customers, but as we qualify them at the new plant, then bringing up our capacity utilization over time. And then, you know, these are customers that a lot of them we're selling a lot of our specialty fats and oils to as well. So we, again, want to continue to cross-sell and grow on both categories. But very, very excited that another great new facility with great capabilities to serve the high-value area, but with a very good cost position.

Yeah, I think a couple other things. One is market share. We're really focused on gaining market share, and I think given the offerings that we're going to have and some of the unique products we're going to be able to produce, we feel like we're going to be in a good position for that. And if you look forward, I mean, you're seeing protein and Pop-Tarts and just about everything now, donuts. And, I mean, they're putting protein in everything. And the profile of some of the products we're offering fit really well into that with neutral taste and texture, which is really critical for some of those food opportunities. And we're pretty excited about the timing of this plant coming online. When you think about GLP-1s and the focus on protein intake, it's going to create some real opportunity.

Are you seeing actually some sort of consumer weakness in some of these more like specialty segments, specialty oils, et cetera, in certain areas, but then others maybe not so much, just like the protein piece you've just highlighted, and how do you react to that? Is there anything you can do about it if it's just if the end consumer is weak and there's just not the demand for the raw materials, you have to live with it?

Yeah, our goal is always to use our creative solution centers and work with our customers. And what their needs are continues to evaluate based on the consumer. We're seeing kind of two things. One, those serving more of the cost-conscious consumer, they're looking where can they reformulate based on things that are happening in the market and taking a cost focus. And then some of those that are serving that consumer that's not as price sensitive and some of the stronger brands, they're continuing to innovate because they want to bring forward new SKUs, new product line extensions, and so we're working with them on new, which seems, you know, really odd that you've got cost-saving projects going as well as new product launch work on innovation at the same time, but that is kind of the market that we're living in today.

Okay, got it. Coming back on one of the things around Byterra, and obviously you said it's just a year, synergies are just coming along and it's working together, the budgeting, like making guidance, et cetera, of that business. Obviously, it's a massive operation. It's large, right? I mean, it's two big companies that went together. You've laid out early in the year a couple of, like, opportunities as to what EPS accretion would look like, which was Byterra related. So six months into it, where do we stand right now, more or less, on the Viterra piece? And what do you think about the timeline of the Viterra piece in particular as to the baseline moving on EPS accretion?

Well, I can start, Greg. So there were really three components we laid out related to Viterra. One was cost synergies, and I'll talk about that in a minute, and then commercial and network synergies. and then there was a third piece kind of capital structure related around debt, debt refinancing, share buyback. We completed kind of the capital structure portion. It's been largely completed. We finished our share buybacks earlier this year related to Viterra, and then we've done the refinancing of most of their debt, and the lowest credit spreads we've ever borrowed in the history of Bungie as a result of getting a credit upgrade at the close. So that part's been executed. On the cost side, the SG&A synergies, we had originally estimated about $250 million. Over four years, we recently, well back at an investor day, increased that to $350 million. And we're trying to accelerate that by a year. And I would say we're well on our way there. We expect about $190 million in 26. We communicated that earlier in the year. And we feel like a lot of momentum into capturing those two pieces. So the things we can control, I think we're doing a really nice job, and Greg can certainly comment on the commercial side.

Do you want to talk about when we're on a run rate versus a real life?

Yeah, well, yeah, by the end of the year we'll be over $200 million run rate on cost synergy. So we're going to realize in the P&L $190 million this year. And so we'll be very close to our original $250 target run rate by the end of this year, but we're not stopping. We think we're going to capture another $100-plus million, and then we won't stop, right? I mean, we're going to keep looking for opportunity.

And then if you remember, we talked about the commercial synergies, why we won't report on those. Those will have to be seen. You'll have to see that at the bottom line in the gross margin. Now, the teams couldn't work on that until we closed, but they've been doing a fantastic job of really thinking through how we're going to grow with the right customers, how we're going to optimize the network on where we're going to put capital in our assets, where we do need de-bottlenecking, which assets we may not run. We may sell a random asset here and there. And, you know, those you'll see proven out over time. But, you know, we want to be the partner of choice not just for the customers, but with our providers. If you think about transportation providers, you know, we've taken that focus, whether it's truck, rail, barge, container, ocean-going vessel, to make sure that we're using the importance that we have to those providers, that we're operating on the best contract that each one of us had, and that when we think about how we're negotiating going forward, we're lowering that cost between the end consumer and the farmer, and that benefits both of them.

Picking up on one thing, you said you finished the $2 billion buyback. Obviously, that was part of the transaction in first place. But you've also announced share buyback authorization to basically further return cash to shareholders, aside from dividend, also through buybacks. And I think you have a pretty sporty target here to really step that up. How should we think about the timeline for this in terms of kicking in? When are you going to start doing those more accelerated buybacks?

So the way the framework was set up ultimately is what we said is we're going to start with adjusted funds from operations or cash flow. and we're going to first take care of maintaining our assets. So we're going to spend, call it $700 million to $800 million a year on capital for maintenance of our existing footprint. Of that remaining amount, which we describe as discretionary cash flow, our target is to allocate 50% of that to shareholder returns. That's going to come in the form of dividends and share buyback, which in the long run are going to be roughly about the same number. You know, over time, dividends will continue to grow, probably at a modest rate. But what we're looking at is by 2030 to roughly be $700 million in dividends, $700 million in share buybacks. Between now and then, it'll kind of steadily ramp toward that number. You know, in 26, we've largely, with the finishing our $250 million, we don't anticipate any more allocation to share buyback. This year doesn't mean it won't happen, but really our framework was built to start in 2027. May not happen on exactly a straight line, but over time, that's what our plan is. And so, you know, if there's an opportunity here, there we'll see one way or the other. If there's no opportunities for us to deploy capital in a smart way elsewhere, we could accelerate buybacks even in excess of that. And then ultimately when we get to 2030, you know, the way we look at the numbers, once we get to that $13 baseline run rate, we're going to have excess cash, if we think, and drive us to that $15 number that we laid out, which will include additional share buyback over and above the normal framework, just given we believe we'll be generating a significant amount of cash flow by that point.

And one piece of that, I guess, is also CapEx coming down from a roughly 1.6-ish billion this year. I think you got 1.5 to 1.7. You expect that to come down closer to 1 billion, 1.1. But when should we expect that to be the case? Like, what's like the phasing of that? And then as CapEx comes down and then obviously frees up cash for buybacks, What's like, aside from buybacks, maybe the appetite for M&A?

So the trajectory we see, so we said this year 1.5 to 1.7 billion this year. Next year we will largely have ramped down all of our mega projects with the exception of our planned in Amsterdam. We'll be finishing up around Q1, so some of that likely to spill into Q2 in terms of CapEx. Second half of 27, we should be much closer to our 1.1 run rate, which is about, again, $700 million to $800 million of maintenance and call it $300 million to $400 million of growth and productivity CapEx. To be defined, we don't necessarily have specific projects today, but we think that generally that will be about the run rate between improving our existing assets and maybe some opportunistic things. From M&A's standpoint, we'll see if those things come. And if something makes sense, strategically makes sense, meets our hurdle rates, fills a gap in our footprint or something strategically we want to do, we'll allocate capital that way. But otherwise, it'll be primarily share, buyback, and returns as we focus on really driving EPS ultimately.

Greg, in closing, any messages? We haven't touched on anything you would like to get definitely out there.

Yeah, well, I would just say I couldn't be more proud of the team. The way that we've brought these businesses together the last year, nobody talks about whether they were Bungie or Viterra before. Everybody is Bungie. The way that we are working with our farmer customers as well as our consuming customers and all of the benefits that we thought that we would get, We're not all the way to bright, but we continue to make great progress. And in this world, you know, whether you want to talk about the fact that we believe it's going to stay complicated, right? Globalization, which we all enjoyed for decades, made the world an easier place to operate in our business. Every origin opened every destination. That feels like that's done, and that's done for a period of time. And so as we continue to increase yields, to increase the production to meet the growth in population and the increase in the income, the per capita consumption increases for fats and oils and animal proteins and protein meals, we've got to meet that with the same hectares and the same acres, and that means more production. And we've got a weather cycle that is definitely more violent. So when there is a production problem, it's a bigger issue to serve demand. And as I said, every origin is not open to every destination. And so our capabilities not only help us manage our risk, but help our customers manage their risk. And we've never been in a better position. So it's funny to have a 208-year-old company that feels like a new company and that is really built for the complexity, whether it is the geopolitical or the weather or policy uncertainty. But as Biofuels continues to grow and it becomes complex to serve the customers, we've never been in a better position. And I know we can count on this team to deliver.

Perfect.

Well, that's a wrap. on time.

Thank you very much.

There will be no breakout.