BG Bunge Dec 2009 Presentation

8/14/2019 BG Bunge Dec 2009 Presentation

1/26

Citis 2009 Food Fest -1stAnnual Food Manufacturing Conference

December 3, 2009


2/26

Forward Looking Statements

Todays presentation includes forward-looking statements thatreflect Bunges current views 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 filewiththe SEC concerning factors that could cause actual results to differmaterially from those contained in this presentation, and encourages

you to review these factors.

2


3/26

We Are a Leading Global Agribusiness & Food

CompanyKEY FACTS

Employees: 25,000+

Facilities: 400+

Countries of Operations: 30+

2008 Net Income: $1.06 bill ion

2008 Total Volume: 138 mmt

NORMALIZED SEGMENT EBIT

Fertilizer

35%

Food &

Ingredients20% Agribusiness45%

A leader in oilseed processing A leader in global grain and

oilseed marketing

Originate commoditiesin worlds primary growingregions and distribute themin over 75 countries

South Americas largestfertilizer producer

Only completely verticallyintegrated fertilizer companyin Brazil

Direct access to 4 of Brazils5 primary phosphate mines

Leading producer of consumerbottled oil brands in South

America, Europe and Asia

Leading supplier to food servicecompanies and food processorsin North America

Leading corn and wheat millerin the Americas

Fertilizer AgribusinessFood & Ingredients

3


4/26

Balanced Global Asset Network

4Fertilizer Agribusiness Food & Ingredients

World needs to double food product ion by 2050 to meet needs of larger, wealthier population

- U.N. Food and Agriculture Organization


5/26

Our Winning Approach

5


6/26

Growing Core Businesses

Secure reliable access to larger raw material supply

Build distribution business in the Americas

6

Fertilizer

Optimize oilseed value chains and build share in growth markets

Increase share of world grain trade

Develop energy expertise and biofuels marketing capability

Agribusiness

Strengthen edible oils business, offer new value-added oil productsand enter new geographies

Maintain strong positions in wheat and corn dry milling

Food & Ingredients


7/26

Expanding Local Mines to Meet Growth

7

Key Facts

Leading presence in fast growing

fertilizer marketLocal mining production has logistical costadvantage of $40-$60/MT

Brazilian Retail Ferti lizer Market Volumes

(mmt)

Source: ANDA

CAGR

:6%

Phosphate Rock Production Capacity

Araxa, Brazil

4.90.67 0.34 0.15

2.0 8.1

Current Araxamineexpansion

FosfertilTapira &Catalaominesexpansion

Ani tpo lismineopening

FosfertilSalitre mineopening

Future

(mmt/year)

5

7

9

11

13

15

17

19

21

23

25

1 99 0 1 99 2 1 99 4 1 99 6 1 99 8 2 00 0 2 00 2 2 00 4 2 00 6 2 00 8


8/26

Connecting Our Agribusiness Network

to Promising Markets

8

Port of Longview, WA

Deep water export grain terminal on Columbia River

Second largest export corridor in NA

Most efficient route for moving grain to Asian markets

Joint-venture with ITOCHU and STX Pan Ocean

Annual capacity: 8 million metric tons, capable of

handling grain, oilseeds and protein meals

Project detail

Investment: approximately $200 million

Timing: completion expected by 2011 fall harvest

Architectural

rendering


9/26

Benefits of Value Added Food Products

9

Bunges large oilseed processingbusiness supports value-addedmarket share

Scale

Co-located facilities reduceproduction and logistics costs

Control of input supply allows bettervisibility of raw material costs

Efficiency & Risk Management

Farm to consumer traceabilityimproves confidence

Food Safety

0%

20%

40%

60%

80%

100%

Oils

P

ackaging

In

gredients

M

anu

facturing

SG&A

Di

stribution

Total

Margarine: Generalized Unit Cost Structure


10/26

Leveraging Our Expertise

in New Product Areas

10

Origin

ation

Logistics

RiskManagement

Proce

ssing

Corn Dry and Wheat Mill ing

Corn Wet Milling

Oilseeds & Grains

Sugar

Fertilizer

Palm

Marketing&

Distribution

Expertise Current ValueChains

Future ValueChains


11/26

Sugar and Sugar-Based Ethanol

11

Sugarcane Market

Strong global growth

Fragmented market with consolidationopportunities

Key product for Bunge customers

Brazil is the low cost sugarcane producer


12/26

Building a Network of Sugarcane Assets

MT BADF

TO

MS

PR

MG

SP RJ

ES

Paranagu

Santos

Vitria

Santa

Juliana

Monte

Verde

Pedro

Afonso

Sugarcane Mills

0

2

4

6

8

10

12

14

2009e 2010 2011 2012 2013 2014

3

13Millionmetrictonssugarcane

Santa Juliana MG Brazil

Monte Verde MS Brazil

Pedro Afonso TO Brazil

Milling Capacity

12


13/26

Global Network Drives

Efficiency & Service

13

Key Facts

Market access

Flexibility and reliability

Efficient logistics

Destrehan, Louisiana

Bunge Spain & Italy

Latin America, CaribbeanAsia, Mid-East

Elevator Port Terminal

Oilseed Processing Plant Customer

Bunge China

South America

Bunge North America Expor t Flow

30%

30%

40%

EuropeMiddle East

AfricaLatin America

Asia

U.S. Elevator Network


14/26

Integration in Key Areas

Unlocks Greater Value

14

Analy tics

Product Lines

Logistics

Risk

ManagementSAP

HRFinanceCapital

Al locationStrategy

Food & Ingredients

FoodProcessing

Retail andConsumer

Agribusiness

OriginationOilseed &SugarcaneProcessing

Fertilizer

Nutrients

RetailProductsandServices


15/26

15

Financial Performance


16/26

Strong Track Record of Financial Performance

16

(1) Total segment EBIT is a non-GAAP financial measure. A reconciliation to the most directly comparable GAAP measure is included

elsewhere in this presentation.(2) Excludes $111 million gain on the sale of the Brazilian soy ingredients business.

Net IncomeUS$ millions

(2)

VolumesMillions of metric tons

Total Segment EBITUS$ millions

(2)

(1)

1,064

CAGR:10% CAGR:26%

CAGR:34

%


17/26

Consistently Generating Excess Returns

17

ROIC is an important performance measure

ROIC has exceeded cost of capital (WACC) every year since IPO

Current WACC is approximately 9% vs. 8.5% in past years

Note: ROIC is defined as the sum of income from continuing operations before income tax and minority interest plus interest expense timesthe effective tax rate divided by the average total capitalization. ROIC is a non-GAAP financial measure. A reconciliation to the mostdirectly comparable GAAP measure is included elsewhere in this presentation.

(1) Excludes $111 million gain on sale of the Brazilian soy ingredients business and losses from discontinued operations of $7 million.(2) Results benefitted from tax credits

(1) (2) (2)


18/26

Bunge Limited Results

Quarter Ended September 30Quarter EndedSeptember 30,

$2.48

$350

$107

$(442)

$760

$425

107,599

2009

$9.26

$1,274

$122

$610

$1,035

$1,767

102,502

2008

(27)%73%$170$294Agribusiness

(172)%(251)%$84$(127)Fertilizer

(12)%700%$(7)$42Food & Ingredients (2)

(73)%(5)%$1.70$1.62Earnings per share

(73)%(1)%$234$232Net income attributable toBunge

(76)%(15)%$247$209Total segment EBIT (1)

5%5%35,22136,843Volume (000 mt)

%-%-20082009

$ in millionsexcl. volume & EPS

(1) Total segment EBIT is a non-GAAP financial measure. A reconciliation to the most directly comparable GAAP measure is includedelsewhere in this presentation.

(2) Includes edible oil products and milling products segments

Nine Months EndedSeptember 30,

18


19/26

Bunge Limited

Balance Sheet Summary

(1) Current assets (excluding cash and cash equivalents and marketable securities) less Current liabilities (excluding short-term debt andcurrent portion of long-term debt).

(2) 12 month rolling average

$7,436

$3,583

46.5

$2,741

$5,653

$4,635

Dec. 31,

2008

$8,710

$4,293

46.8

$3,304

$6,995

$6,013

Sep 30,

2008

47.0Cash Cycle Days (2)

$2,568- Readily Marketable Inventories

$9,522Total Bunge Shareholders Equity

$4,078Total Debt

$4,835- Inventories

$5,165Operating Working Capital (1)

Sep 30,

2009

$ in millions

19


20/26

Bunge Limited

Cash Flow Summary

Quarter EndedSeptember 30,


$1,727$(547)$2,210$1,207Cash Flow from Operations

$(594)$(596)$(222)$(250)Capital Expenditures

$(275)$(539)$1,417$1,163Working Capital Changes

$2,002$(8)$793$44Funds from Operations

(before working capital changes)

2008200920082009

$ in millions

20


21/26

Attractive Growth Profile: Financial Targets

21

Company-Wide

(average annual growth over 5 years)

Average EPS growth of 10 - 12% per year

ROIC at least 2 points > WACC

Business Segments(average annual growth over 5 years)

Volume Growth

Agribusiness

6 - 8%

Fertilizer

5 - 7%

Food & Ingredients

3 - 5%


22/26


23/26

Backup: Non-GAAP Reconciliation Notes

23

Total segment earnings before interest and tax

Total segment earnings before interest and tax (EBIT) is consolidated net income

attributable to Bunge excluding interest income and expense and income tax attributable toeach segment.

Total segment EBIT is a non-GAAP financial measure and is not intended to replace netincome attributable to Bunge, the most directly comparable GAAP financial measure. Totalsegment EBIT is an operating performance measure used by Bunges management to

evaluate its segments operating activities. Bunge believes EBIT is a useful measure of itssegments operating profitability, since the measure reflects equity in earnings of affiliatesand minority interest and excludes income taxes. Income taxes are excluded asmanagement believes they are not material to the operating performance of its segments.Interest income and expense have become less meaningful to the segments operatingactivities as Bunge is financing more of its working capital with equity rather than debt. Inaddition, EBIT is a financial measure that is widely used by analysts and investors inBunges industries. Total segment EBIT is not a measure of consolidated operating resultsunder U.S. GAAP and should not be considered as an alternative to net income or anyother measure of consolidated operating results under U.S. GAAP.


24/26


24

Reconciliation of total segment EBIT to net income:

In millions 2001 2002 2003 2004 2005 2006 2007 2008

Total Segment EBIT $275 $419 $561 $796 $543 $618 $1,208 $1,363

Interest - net (134) (107) (113) (110) (126) (161) (187) (147)

Income tax (72) (104) (201) (290) 82 36 (310) (245)

Minority interest share of interest and tax 64 46 53 73 31 28 67 93

Other (1) 1 1 0 0 0 0 0 0

Net income $134 $255 $300 $469 $530 $521 $778 $1,064

(1) Excludes $111 million tax-free gain on the sale of the Brazilian soy ingredients business.

(1)


25/26

Below is a reconciliation of total segment EBIT to net income attributable to Bunge:

Backup: Non-GAAP Reconciliation

$234

32

(5)

(97)

57

$247

2008

$232

(15)

97

(79)

20

$209

2009

$1,274$350Net income attributable to Bunge

92(11)Noncontrolling interest share ofinterest and tax

(459)52Income tax benefit (expense)

(285)(212)Interest expense

15996Interest income

$1,767$425Total segment EBIT

20082009($ in millions)

Quarter EndedSeptember 30,


25


26/26


26

Return on Invested Capital:Bunge calculates Return on Invested Capital (ROIC) as net income plus/minus minority interest, income tax (benefit) expense,discontinued operations-loss/gain and interest expense times the effective tax rate divided by the average total capital. Bunge believesthat ROIC provides investors with a measure of the return the company generates on the capital invested in its business. ROIC is not ameasure of financial performance under generally accepted accounting principles and should not be considered in isolation or as analternative to net income as an indicator of company performance or as an alternative to cash flows from operating activities as a

measure of liquidity.

(US$ in millions)

FISCAL YEAR ENDED DECEMBER 31, 2008 2007 2006 2005 2004 2003 2002 2001

Net income $1,064 $778 $521 $530 $469 $411 $255 $134

Add back/subtract:

Minority interest 262 146 60 71 146 104 102 72

Income tax (benefit) expense 245 310 (36) (82) 289 201 104 68

Interest expense 361 353 280 231 214 215 176 223

Discontinued operations-loss/(gain) 7 (3) (3)Cumulative effect of change in accounting principles 23 (7)

Gain on sale of soy ingredients business (111)

Operating income before tax $1,932 $1,587 $825 $750 $1,118 $827 $657 $487

Effective tax rate 16% 26% 0% 0% 32% 33% 22% 26%

Operating income after tax $1,623 $1,174 $825 $750 $760 $554 $512 $360

Shareholders' equity $7,436 $7,945 $5,668 $4,226 $3,375 $2,377 $1,472 $1,376

Minority interest 692 752 410 325 280 554 495 493

Total Debt 3,583 4,547 3,484 3,146 3,281 3,394 3,403 1,813

Total capital $11,711 $13,244 $9,561 $7,697 $6,936 $6,325 $5,370 $3,682

Total capital (end of year) $11,711 $13,244 $9,561 $7,697 $6,936 $6,325 $5,370 $3,682

Total capital (beginning of year) $13,244 $9,561 $7,697 $6,936 $6,325 $5,370 $3,682 $4,207

Average total capi tal $12,478 $11,403 $8,629 $7,317 $6,631 $5,848 $4,526 $3,945

ROIC 13% 10% 10% 10% 11% 9% 11% 9%

Documents

BG Bunge Dec 2009 Presentation