Bunge Global SA

Good day and welcome to the Bungie Limited first quarter 2019 earnings release and conference call. All participants will be in 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. Please note, this event is being recorded. I would now like to turn the conference over to Ruth Ann Weisner. Vice President, Investor Relations. Please go ahead.

Thank you, Operator, and thank you for joining us this morning. It's great to be here at Bungie. 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 section of our website at bungie.com under Investor Presentations. Reconciliations of 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, Chief Executive Officer, and Tom Boehler, Chief Financial Officer. I'll now turn the call over to Greg.

Thank you, Ruthann, and good morning. I'm honored to have the opportunity to serve as Bungie's new CEO, and we have a lot to discuss today. But first, I'd like to welcome Ruthann Wiesner, our new head of investor relations. Ruthann joined Bungie in March and brings a wealth of experience in food and agricultural industries from Tyson Foods and ADM, among others. Ruthann's relationships with analysts and investors will be a great asset for us, and I'm delighted to welcome her to the Bungie team. We are aggressively moving forward on the priorities we discussed last quarter, and we continue to ramp up the important efforts already underway to improve our business and operations. This morning, I want to share with you why I'm excited about the company's prospects. I'll then cover some organizational changes that we announced today. We will review our strategic priorities, and then Tom will provide additional detail on our first quarter results. And then finally, we'll open it up for Q&A. Over the past several months, I focused on getting to know Bungie better by visiting many of our locations and meeting with our people across the globe. In South America, Europe, and the U.S., I've seen some of our operations up close and received valuable feedback from employees on their ideas to improve how we operate. I've also seen the depth of our employees' knowledge, passion, and commitment to the success of our business going forward. I've gained new insights into how our business segments complement each other and how we can use those relationships to better leverage our assets. For example, as we had expected, integrating Loader's Croquin into our legacy portfolio is giving us opportunities to become a valued supplier of additional products and services to both new and existing customers. Bungie has a powerful global franchise in oilseeds and oils. We are the number one crusher in the world with the largest South American footprint, strong positions in other key geographies, and a new and evolving oils platform. Combined with our worldwide grains distribution network and regional milling footprint, this provides us with unmatched scale and expertise. We can better execute on the opportunities generated by our scale when our internal structure, systems, processes, and people are aligned. This requires a new level of speed and execution across the organization. To achieve this, we'll shift to a global operating model from our current regional structure, as we've detailed in a separate announcement this morning. This new structure will simplify how we operate, drive greater transparency and accountability, reduce costs, and support our renewed and deeper focus on customers and execution. As part of this reorganization, our commercial activities will be aligned around our handling and processing assets, management of physical product flows, and the risk management and optimization associated with our global business. In addition, Bungee Loaders Croakland will now report directly to me. I want to ensure this business is positioned appropriately and achieves its full potential. Also, as you've seen, John Kneppel will be joining us at the end of the month as our new Chief Financial Officer. I've worked with John for many years. His expertise in the agribusiness, food, and ingredients industries and his successful track record will enable him to make a significant contribution here. Tom Bollert will stay on to ensure a smooth transition with John. Tom's been a great contributor to Bungie, including in spearheading our successful global competitiveness program, and we're fortunate to have a world-class financial team that he has assembled. I also want to express my personal gratitude to Tom for his key role in supporting Board Chair Kathy Heil and me in our new roles over the past several months. We have a deep and talented bench within our key businesses, and I have full confidence in the team. Together, we're working aggressively against our three strategic priorities, driving operational performance, optimizing the portfolio, and strengthening financial discipline. Regarding operational performance, While we missed opportunities and did not operate our plants at the full utilization the market provided last year, our network and physical facilities are sound. Over the last three months, I've worked with the team to tighten up how we operate and better manage the inherent value at risk. Expectations are clear, and I'm very pleased with the level of engagement. Through the process of portfolio optimization, We have identified specific assets and established dedicated teams of internal and external resources to rationalize the portfolio. We're making progress on these projects, which will ultimately improve Bungie's earnings and returns. We know you're eager to hear more, and we will share developments and additional information when we can. We are also continuing to strengthen our financial discipline, reemphasizing controls on working capital and capital spending. Any future investments will be carefully scrutinized and aligned with our strategic priorities. We will be reluctant to spend growth capital on any project that is not funded by improvements in business results or execution on portfolio changes. On operating costs, I'm very pleased with what we've achieved through our Global Competitiveness Program. The GCP has already gone a long way to reduce costs, simplify how we work, and help us think differently. We will use this momentum, along with the changes to our operating model, to develop a cost structure for the cyclical nature of our industry. We still have work to do to get our processes and operations where they need to be, and that's a key focus over the coming weeks and months. However, I am encouraged by the energy and engagement of the team and the direction the company's heading. Turning to Q1 results, they were largely in line with our expectations. Soy crush margins were better year over year in the U.S., Brazil, and Europe, partly offsetting weaker results in Argentina and China. Higher results in edible oils were driven by a full quarter of loaders' ownership and continued synergy benefits. In addition, I want to commend our North American team, which kept facilities operating at very good levels, despite severe weather that disrupted operations and logistics in the U.S. Based on current market conditions, Our view on the 2019 full-year consolidated results has not changed from what we shared with you in February. That said, there are a number of unprecedented factors in the market. First, African swine fever has caused the largest decline of animal protein supplies in recent memory, a decline equal to the entire US swine herd, and the full impact of this disease remains to be seen. Second, The most recent USDA forecast suggests global soybean inventories will exceed 107 million metric tons as of September 1st, a record high. Additionally, most of these inventories remain in the hands of producers, and we believe future producer marketing patterns will be affected by how the U.S.-China trade discussions evolve. While these dynamics should create positive catalysts for our globally diverse footprint, the timing and magnitude of these potential benefits remain unclear. I'll now turn the call over to Tom to go through the numbers in greater detail.