Bunge Global SA (BG) Q4 2025 Earnings Call Transcript
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Overview
The earnings call summary and Q&A session reveal mixed sentiments. While there are optimistic aspects like synergies from the Viterra acquisition and potential market opportunities in SAF, challenges such as lower guidance due to higher costs and uncertainties in the grain market balance these out. The management's unclear responses on key metrics and guidance further contribute to a neutral sentiment. Without market cap information, the overall stock price movement is predicted to remain neutral, with potential fluctuations around the 2% range.
Key Financial Performance
Reported EPS (Earnings Per Share) $0.49 in Q4 2025 compared to $4.36 in Q4 2024, a significant decrease. The decline was due to an unfavorable mark-to-market timing difference of $0.55 per share and an unfavorable impact of $0.95 primarily from notable items such as the settlement of the U.S. defined benefit pension plan, Viterra transaction integration costs, and an impairment of a long-term investment. Prior year results included a net positive impact of $0.98 from notable items, primarily related to the gain on the sale of the sugar and bioenergy joint venture.
Adjusted EPS $1.99 in Q4 2025 compared to $2.13 in Q4 2024, a slight decrease. The decline was attributed to lower net tax benefits in the current year.
Adjusted Segment EBIT (Earnings Before Interest and Taxes) $756 million in Q4 2025 compared to $546 million in Q4 2024, an increase of $210 million. The increase was driven by higher results across all segments, including soybean processing and refining, softseed processing and refining, and grain merchandising and milling.
Soybean Processing and Refining Segment Higher results in Q4 2025 were primarily driven by South America, reflecting higher processing and refining results in Argentina and Brazil. Lower processing results in Europe and origination in the Americas were partially offset by improved results in Asia. Higher process volumes were attributed to expanded production capacity in Argentina, and higher merchandise volumes reflected an expanded soybean origination footprint.
Softseed Processing and Refining Segment Higher results in Q4 2025 were driven by better average processing margins and the addition of Viterra softseed assets and capabilities. Higher process volumes were due to increased production capacity in Argentina, Canada, and Europe, while higher merchandise volumes were driven by an expanded softseeds origination footprint.
Grain Merchandising and Milling Segment Higher results in Q4 2025 were primarily driven by global wheat and barley as well as wheat milling, partially offset by lower results in global corn and ocean freight. Higher volumes reflected an expanded grain handling footprint and capabilities along with large global green crops.
Net Interest Expense $176 million in Q4 2025, an increase compared to the prior year. The increase was due to the addition of Viterra, partially offset by lower average net interest rates.
Adjusted ROIC (Return on Invested Capital) 8.1% for the trailing 12 months ending Q4 2025, compared to a lower ROIC of 6.9%. Adjusting for construction in progress and excess cash, adjusted ROIC would increase to 9.3%.
Discretionary Cash Flow Approximately $1.25 billion for the full year 2025, similar to the prior year. The cash flow yield or cash return on equity was 9.4%, compared to a cost of equity of 7.2%.
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Operating Highlights
Viterra combination: Completion of the Viterra combination, which has increased connectivity and flow of information across the organization, optimizing operations and unlocking synergies in origination, merchandising, processing, and distribution.
Greenfield projects: Advancing large greenfield projects despite challenges like trade flows, policy uncertainty, and geopolitical volatility.
Expanded footprint: Expanded production capacity in Argentina, Canada, and Europe, leading to higher processing and merchandise volumes in soybean and softseed operations.
Global reach: Greater reach across origins and destinations, deeper insight into global flows, and enhanced capability to serve customers and manage risks due to the Viterra acquisition.
Synergy capture: Unlocking synergies in operations, optimizing flows between origin and destination, and improving logistics and coordination.
Segment performance: Higher results in all segments, driven by strong execution and expanded capabilities, with notable improvements in soybean and softseed processing and refining.
Portfolio optimization: Reshaped the company into a more agile, diversified, and resilient organization through disciplined execution and strategic investments.
Transformation journey: Continuous improvement and transformation to strengthen the company's position and capabilities.
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Risk or Challenges
Geopolitical tensions: Geopolitical tensions and volatility are influencing trade flows and creating uncertainty in the market, which could impact operations and financial performance.
Biofuel policy uncertainty: Uncertainty around U.S. biofuel policy is affecting farmer and consumer behavior, creating challenges in planning and execution.
Integration costs and challenges: The integration of Viterra has incurred significant costs and complexities, including transaction integration costs and operational adjustments.
Economic and market environment: The external environment remains complex with limited forward visibility, which could hinder strategic planning and operational execution.
Interest expense: Net interest expense has increased due to the acquisition debt related to Viterra, which could impact financial performance.
Supply chain and trade flow disruptions: Navigating trade flows and policy uncertainty has been challenging, particularly in the context of geopolitical volatility.
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Guidance & Outlook
2026 Adjusted EPS: Expected to be in the range of $7.50 to $8, reflecting the current margin and macro environment of forward curves.
2026 Adjusted Annual Effective Tax Rate: Forecasted to be in the range of 23% to 27%.
2026 Net Interest Expense: Expected to range between $575 million and $625 million.
2026 Capital Expenditures: Projected to be in the range of $1.5 billion to $1.7 billion.
2026 Depreciation and Amortization: Estimated to be approximately $975 million.
Market Environment: The environment remains complex with limited forward visibility, particularly related to U.S. biofuel policy. Opportunities are expected to develop during the year once the policy is finalized.
Synergy Capture and Long-term Outlook: Details on synergy capture, capital allocation priorities, and combined long-term outlook will be provided at the Investor Day on March 10.
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Shareholder Return Plan
Dividends Paid: $459 million in dividends were paid for the full year.
Shares Repurchased: 6.7 million Bunge shares were repurchased for $551 million.
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Key Q&A
Q:To what extent do you think the RVO might be reflected in the curve today, and has the recent increase in board crush margins impacted your crush operations' margins?
A:The outlook does not include assumptions about the RVO's impact beyond what the current curves show. U.S. curves, especially in the second half, have improved slightly, likely due to RVO tailwind expectations. However, there is limited business beyond Q1, and high U.S. oil stocks persist until demand increases. Soybean meal demand has been strong globally, which helps crush margins.
Q:What is the expected earnings cadence for the year, and how does it compare to historical seasonality?
A:The earnings cadence for this year is expected to be 30-70 between the first and second halves, with Q1 and Q2 split at 35-65. This is lighter in the first half compared to typical years, partly due to the timing of RVO changes.
Q:Did you use a different approach to set guidance this time compared to previous quarters?
A:No, the same approach was used, relying on forward curves and adjustments based on physical market observations. The RVO's finalization and related uncertainties were not factored into the guidance.
Q:Can crush margins replicate the levels seen in 2022-2023 given increased capacity and biofuel policy changes?
A:While increased capacity and constructive biofuel policies globally are positive, it is uncertain if crush margins will replicate 2022-2023 levels. The company has a balanced global footprint and expects biofuel policies to remain constructive, but exact predictions are difficult.
Q:What are the opportunities to transform the earnings power of Viterra operations post-acquisition?
A:The integration of Viterra offers opportunities to share best practices, align rewards programs, and optimize the combined portfolio. The focus is on running the right assets and businesses for long-term success, leveraging a global diversified balance across crops, geographies, and operations.
Q:What are the synergy expectations for 2026, and how will they phase in?
A:The company expects $190 million in realized synergies for 2026, ahead of schedule. This includes $120 million incremental synergies compared to 2025. Cost synergies are well-defined, while commercial synergies are still developing and modestly included in the forecast.
Q:Why is the guidance lower year-over-year despite synergies and a better operating environment?
A:The guidance reflects full-year impacts of Viterra's acquisition, including higher interest costs, depreciation, and shares outstanding. Some business areas, like grains and merchandising, are not yet performing optimally. The forecast uses current forward curves, which may not fully capture potential improvements.
Q:What explains the light Q1 EPS and the higher second-half EPS in the guidance?
A:Q1 EPS is light due to lower soy and soft crush margins, delayed Australian harvests, and spot market behavior. The second half is expected to benefit from potential RVO finalization, normalized trade flows, and improved sunseed production in the Black Sea and Europe.
Q:How should we think about the grain merchandising and handling business in 2026?
A:The combined platform is expected to improve year-over-year, especially in the first half. The focus is on optimizing the larger footprint, leveraging ocean freight efficiencies, and adapting to trade disruptions. The business is seasonal, and improvements are anticipated as integration progresses.
Q:What is the expected return on growth investments, and when will they materialize?
A:Mega projects will see reduced spending in 2026, with contributions expected in 2027. The Morristown plant will begin operations in 2026 but will focus on customer qualification. Other projects, like Destrehan and Weston, will contribute meaningfully in 2027. Additional growth projects are under review.
Q:What is the segmental breakdown of the 2026 guidance?
A:Approximately 50% of core segment EBIT is expected from soy processing and refining, 25% from soft processing and refining, 20% from grain merchandising and milling, and 5% from other processing and refining. Corporate and other expenses are estimated at $120-$125 million per quarter.
Q:What is the company's view on the RVO volumes and the half RIN generation concept?
A:The company hopes for RVO volumes to be at the higher end of the 5.2-5.6 billion gallons range, especially if the half RIN concept is delayed to 2027. Clarity is expected in the coming weeks.
Q:What is the market opportunity for Bunge in sustainable aviation fuel (SAF) under the CORSIA PLUS protocol?
A:The company sees SAF as a nascent but potentially massive market. While no significant contributions are included in the 2026 forecast, Bunge is well-positioned to meet future demand through partnerships and global farmer connections.
Q:What determines the range of the $7.50 to $8 guidance?
A:The range depends on market developments, demand, and execution. Factors include soy and soft crush margins, merchandising opportunities, and the realization of cost and commercial synergies. The company sees more potential for positive developments than negative ones.
Q:Why did buybacks drop significantly in Q4, and what is the outlook for buybacks?
A:The drop in Q4 buybacks was due to completing most of the program earlier. The company is committed to completing the remaining program soon and plans to make buybacks a larger part of capital allocation, with more details to be shared on Investor Day.
Q:Why is Q1 guidance significantly lower than Street expectations?
A:The Street may have overestimated the timing of RVO impacts and market improvements. The company's guidance reflects a light Q1 due to current market conditions and the delayed impact of RVO finalization.
Q:What are the commercial synergy opportunities post-Viterra integration?
A:Opportunities include increasing direct farmer purchases, optimizing the combined footprint, and developing new markets for softseed products. The integration has enhanced the company's ability to serve customers and adapt to trade disruptions.
Q:Review of Unclear Management Responses
A:Management avoided providing a direct answer on whether crush margins could replicate 2022-2023 levels, citing uncertainties and a lack of specific predictions. Additionally, they did not provide a clear view on the expected RVO volumes or the half RIN generation concept, emphasizing the need for further clarity.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
America oil
America processing
Americas result
Argentina Brazil
Asia North
Asia Results
Brazil destination
Day greenfield
EBIT segment
Europe line
Europe origination
Haden Slide
Merchandising Milling
Processing Refining
Refining segment
bioenergy venture
capacity Argentina
cost capital
environment visibility
footprint capability
grain
interest rate
merchandise volume
merchandising activity
oil merchandising
origination footprint
process volume
processing refining
processing result
production capacity
refining result
result corn
return
sale
segment result
sugar bioenergy
term investment
trade flow
volume production
wheat
BG Transcript
Bunge Global SA (BG) Q4 2025 Earnings Call Transcript
Unknown2-4
The earnings call summary and Q&A session reveal mixed sentiments. While there are optimistic aspects like synergies from the Viterra acquisition and potential market opportunities in SAF, challenges such as lower guidance due to higher costs and uncertainties in the grain market balance these out. The management's unclear responses on key metrics and guidance further contribute to a neutral sentiment. Without market cap information, the overall stock price movement is predicted to remain neutral, with potential fluctuations around the 2% range.
Bunge Global SA (BG) Q3 2025 Earnings Call Transcript
Unknown11-5
The earnings call reveals mixed signals: while the company maintains its full-year EPS guidance and highlights stability from the Viterra merger, it also reports softer Q4 expectations and challenges in Viterra's integration. The management's optimistic view on future demand and improvements is tempered by the lack of clear guidance and current performance issues. The Q&A indicates some investor concerns about policy uncertainties and integration challenges. Given these factors, the sentiment remains neutral, with potential for minor fluctuations based on future developments.
Bunge Global SA (BG) Q2 2025 Earnings Call Transcript
Positive7-30
The earnings call summary indicates a positive sentiment due to strategic initiatives like the Viterra acquisition and new partnerships, which are expected to deliver synergies and improve market positioning. The Q&A section reveals optimism about future synergies, improved crush margins, and strong demand for products, despite some uncertainties. The reaffirmed guidance and planned share buybacks also contribute positively to investor sentiment. Overall, the strong strategic positioning and optimistic future outlook outweigh the current challenges, suggesting a positive stock price movement.
Bunge Global SA (NYSE:BG) Q1 2025 Earnings Call Transcript
Unknown5-8
The earnings call revealed several negative indicators: a decline in both reported and adjusted EPS, pressured milling margins, and market volatility. The Q&A highlighted uncertainties, particularly with the Viterra transaction and U.S. biofuel policies. Although there are positive aspects like the Repsol partnership and strong liquidity, the overall sentiment is negative due to financial underperformance and guidance uncertainties, likely leading to a stock price decline of 2% to 8%.
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