Bunge Ltd

Good day and welcome to the Bungie Global SA fourth quarter 2024 earnings release and conference call. Today, all participants will be in a listen-only mode. Should you need assistance during today's call, please signal for a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask your questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, you may press star, then two. Please note that today's event is being recorded. I would now like to turn the conference over to Ruthann Wisner. Please go ahead.

Thank you, Operator, and thank you for joining us this morning for our fourth quarter 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's Chief Executive Officer, and John Nepple, Chief Financial Officer. I'll now turn the call over to Greg.

Thank you, Ruthann, and good morning, everyone. I want to start by thanking the team for their continued hard work and commitment in 2024. They made good progress on a number of significant growth projects while also advancing our work to build an even stronger Bungie. Our team is prepared for the close of our business combination with Viterra. Teams at both companies have put in countless hours of planning to ensure a smooth integration so that our customers at both ends of the value chain farmers and consumers see good continuity of service. And we expect to close the transaction soon. You likely heard we received regulatory approval from the Canadian government last month. Continue to engage in constructive conversations with the regulatory authorities in China while we work through the final stages of the asset divestment process in Europe. We're also in the late stage of the regulatory process for our acquisition of CJ Selecta, a leading manufacturer and exporter of soy protein concentrate in Brazil. We expect that transaction to close in the near future. In the coming weeks, we expect to close our announced partnership with Repsol to develop new opportunities to help meet the growing demand for lower carbon intensity feedstocks for the production of renewable fuels. This alliance is the first of its kind in Europe. It furthers our long-term strategy to create alternative paths towards the decarbonization of agriculture and the role we can play in the liquid fuel supply chain. In October, we announced the completion of the sale of our sugar and bioenergy joint venture in Brazil to BP. As we've discussed, It streamlines our business and allowed us to expand our stock repurchases and authorization. Planning for these large initiatives takes teamwork and cross-functional collaboration. The team's done a great job of running our day-to-day business while also working on these strategic growth initiatives. In addition, we continue to return capital to shareholders through our share repurchases and our regular dividends. We repurchased a total of $1.1 billion of shares in 2024, and share buybacks will continue to be an important part of our capital allocation strategy. Gifting to our operating results, we didn't close the year as expected. In particular, operating conditions have been challenging in South America, and they continue to be in the fourth quarter. Fortunately, we're seeing things stabilize and expect to see significant improvement in the region in 2025. After the Viterra transaction closes, we expect to provide an outlook for the combined company. In the meantime, we are providing an outlook for the current bungie business. Forward visibility is limited, particularly at this point given the increased geopolitical uncertainty. Based on what we see in the markets and the forward curves today, currently expect full-year adjusted EPS of approximately $7.75. For that, I'll turn it over to John for a deeper look at our financials and outlook. John? Thanks, Greg, and good morning, everyone. As Greg mentioned, the fourth quarter came in below our expectations. This was particularly true in South America, where the market environment has been challenging all year, impacting industry margins throughout the oil seed and grain value chains, to include those of our joint ventures. We also felt the impact of a declining margin environment in North America from biofuel trade uncertainty. Now let's turn to the earnings highlights on slide five. The reported fourth quarter earnings per share was $4.36, compared to $4.18 in the fourth quarter of 2023. Boarded results included a favorable mark-to-market timing difference of $1.25 per share The net positive impact of $0.98 per share, notable items, primarily related to the gain on the sale of our sugar and bioenergy joint venture, partially offset by transaction and integration costs associated with Bytera. Adjusted EPS was $2.13 in the fourth quarter, which is $3.70 in the prior year. Adjusted core segment earnings before interest and taxes, or EBIT, was $548 million in the quarter. inclusive of a Ukraine business interruption insurance recovery, $52 million, versus EBIT of $881 million last year. In processing, territory results in Europe and Asia were offset by low results in North America and South America, as well as in European soft seats. Higher merchandising results were driven by improved performance in financial services, efficient freight, and global grains, more than offsetting lower results in global oil. We find in specialty oils, more results in North America were primarily due to the combination of a more balanced supply and demand environment and certainly related to U.S. biofuel policy. Results in Europe, South America, and Asia were also down due to lower margins. The variances were much narrower. In milling, higher results in North America were more than offset by lower results in South The corporate and other increase in corporate expenses was primarily driven by lower performance-based compensation, various project-related expenses in the prior year. More other results related to our captive insurance and securitization programs, buggy ventures. More results in non-core reflect only one month of income from the sugar joint venture that was on the sale. And interest expense of $62 million was down in the quarter compared to last year, reflecting lower net debt levels and interest rates. Increase in income tax expense for both the quarter and full year is primarily due to lower pre-tax income and earnings mix. Adjusting for notable items in market-to-market timing differences, full year adjusted effective income tax rate was approximately 23% of the current and prior year. Let's turn to slide six, where you can see our adjusted EPS and EBIT trends over the past five years. Our performance period reflects a combination of favorable market environment and excellent execution by our team. The recent trend indicates more balanced supply and demand, translating into less volatility and lower. Slide seven details our capital allocation. For the full year, we generated approximately $1.7 billion of adjusted funds from operations. After allocating $451 million to sustaining CAPEX, which includes maintenance, environmental health, and safety, we had approximately $1.2 billion of discretionary cash flow available. Of this amount, we paid $378 million in dividends. That's $925 million in growth and productivity-related CAPEX. about two-thirds of which related to our growth pipeline of large multi-year investments, and repurchased $1.1 billion of money shares. $500 million of those repurchases were from the $728 million of cash proceeds received to date for the sale of our Sugar JV. This resulted in the use of $444 million of previously retained cash flow. Moving to slide eight. We finished 2024 with total CapEx spend of approximately $1.4 billion, which was in line with our last forecast. Moving ahead to 2025, we expect CapEx of $1.5 to $1.7 billion, reflecting the continued investment in our ongoing multi-year greenfield projects. This ranges down from the preliminary estimate of $1.92 billion we provided you previously, reflecting our decision to not pursue some projects. as well as timing changes related to existing projects. We continue to expect turning to a baseline run rate on CapEx level during the second half of 2026. Moving to slide nine. At year-end, readily marketable inventories, or RMI, exceeded our net debt by approximately $2.3 billion. Our adjusted leverage ratio reflects our adjusted net debt to adjusted EBITDA was 0.6 times at the end of the quarter. Y-10 highlights our liquidity position. At year-end, we had committed credit facilities of approximately $8.7 billion, all of which were unused at the end of the year, providing us ample liquidity to manage our ongoing capital needs. In addition, we had a cash balance of approximately $3.3 billion accumulated in large part as a result of a $2 billion of cash proceeds from the U.S. public debt offering that we closed in September. Our proceeds will be used to fund the cash portion of the VITERA transaction. In addition, $6 billion term loan commitment secured last year used to refinance VITERA's outstanding bank debt on closing the transaction. Let's turn to slide 11. In the year adjusted, ROIC was 11.4%, and ROIC was 9.7%. Adjusting for construction and progress, large multi-year projects not yet operating. Any excess cash on our balance sheet for the VITERA closing adjusted ROIC would increase by approximately two percentage points and ROIC by approximately one percentage point. While returns have declined in highs, it remained low above our adjusted weighted average cost of capital of 7.7%. Moving to slide 12. In the year we produced discretionary cash flow of approximately $1.2 billion, the cash flow yield of 11.1%, compared to our cost of equity of 8.2%. Let me turn to slide 13, 2025 outlook. Greg mentioned in his remarks, taking into account the current and macro environment, we expect full year 2025 ingested EPS to be approximately $7.75. Forecast excludes the impact of announced acquisitions expected to be closed during the year. In agribusiness, full-year results are forecasted to be down from last year. Lower results in processing, where improved performance in South America is expected to be more than offset by North American and European soft seats. Results in merchandising are forecasted to be down slightly from last year. Fine and specialty oils, full-year results are expected to be down from last year. merely driven by a more balanced supply and demand environment in North America. More for another, full-year results are expected to be up from last year. Initially, the company expects it falling for 2025. Just an annual effective tax rate of 21% to 25%. An interest expense in the range of $250 to $280 million. Capital expenditures in the range of $1.5 to $1.7 billion. Depreciation and amortization were approximately $490 million. With that, I'll turn things back over to Greg for some closing comments. Thanks, John. So before we go to Q&A, I just wanted to offer a few closing thoughts. Today's complicated global environment, we're confident that the work we've done and continue to do to improve our business and operations positions us well to deliver on our critical mission, connecting farmers to consumers, deliver essential food, feed, and fuel to the world. We continue to see the benefits of our global operating model, our portfolio optimization work, our financial discipline as we navigate the cycles inherent in our industry. With our culture of continuous improvement, our team continues to strengthen the business, both with the M&A work we talked about at the beginning of the call and our ongoing growth initiatives. Construction is going well on our large-scale projects, It will not only bring us new capabilities, it will also allow us to more efficiently and sustainably serve our customers. Improved productivity is at the heart of investments at dozens of our existing facilities around the world. Strategic use of capital, along with the implementation of the Bungie production system, is enabling our teams to set new performance records each quarter. We're also pleased with our performance on our sustainability priorities. We took a major step forward in November. We became the first global commodity exporter capable of 100% traceability and monitoring both our direct and indirect soy purchases in Brazil's priority regions. We're proud to reach this major milestone in our 10-year journey to achieve traceable and verifiable supply chains. As we think about our business in 2025 and beyond, Regardless of how the macro environment evolves, it's confident that our team has the experience, skills, and agility to navigate the changes that drive performance. With the addition of ITERA, we'll be an even stronger bungie, further diversification of assets, geographies, and crops, providing us with even more capabilities and optionality to help address the world's food security needs. With that, I turn to Q&A.

Thank you. We will now begin the question and answer session. As a reminder, to ask a question, you may press star then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. If you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. And today's first question comes from Manav Gupta with UBS. Please proceed.

Morning, Greg. Morning, John. My first question relates to the 2025 guidance. What are the puts and takes, if you could get a little more details? And the reason for the question is that historically you start at a number, and as the execution is better than expected, the number rises. So I'm trying to understand what kind of conservatism is built into the guidance. And my follow-up, I'll ask it up front also, is How are you accounting for the fact that there is policy uncertainty of 45Z? So how are you accounting for that in your annual guidance? Thank you.

Let me start, and John can follow up. So as we look at 25, we definitely heard an environment has less visibility than normal with the trade disruptions and some of the uncertainty around U.S. biofuels. But what we did factor in is that really global oil supply and demand is pretty constructive, right? We've got less palm oil and less soft seed competing with soy. So soy is very competitive right now, and it's taking a bigger share of global flows. And we are seeing more global biofuel demand when you look at it in total outside the U.S., Soybean meal demand has been very good, and that's driven, of course, by the profitability in the animal protein. There's also less wheat with a little bit tighter supply and demand, so less wheat competing with soybean meal and less competition from the mid-proteins. And then in South America, really expect improvement in Brazil. The industry in 24 fought the logistical commitments and take or pay, which really create a lot of demand on supply, which kind of hurt margins across the platform for the industry. Those are exited in 24 and won't be fighting that in 25. And then, of course, Argentina, we've seen the export tax reductions in that economy continues to stabilize. So that should drive a change in farmer behavior and farmer selling. Now, we do expect lower margins in North America and Europe. And, of course, as I believe John said, you know, VITERA, CJ Select, and share repurchases are not factored into 25. And, Manav, I might just add there that, you know, relative to 45Z and uncertainty around policy, we've got, you know, we're making the assumption today that U.S. crush margins lower, as Greg mentioned, but also expect refining premiums to be more challenged at 25. Obviously, if more clarity around policy and get the right demand for soybean oil relative to renewable fuels, that should be helpful for refining premiums. But now we're making assumptions. They'll be down considerably.

Thank you for a detailed response. I'll turn it over.

The next question comes from Heather Jones with Heather Jones Research. Please proceed.

Thanks for the question.

I guess I want to start with, so given that the fact that South America should be better next year as far as on take or pay and Argentina, I'm just wondering what is the offset that y'all are expecting that to be softer in 25?

You were breaking up a little bit. During the beginning, Heather, if I got the question right, it was, as we see South America better, what are the offsets globally?

Yes, in merchandising specifically.

Oh, in merchandising specifically. Yeah, I think, you know, if you look in junk and dress, even versus the model, merchandising is in pretty conservative, and I think it reflects what we're seeing is a more balanced supply and demand situation globally, really across grains and oilseeds. And as we've talked about, that is always the toughest to be able to predict from a timing and size of the magnitude of the opportunities. It would be hard to imagine that the situation will be more complex than we're dealing with right now, and we expect things to kind of get more clear in the second half. The watch out on merchandising versus the opportunity, really, is it does make it tougher for our suppliers, the farmers, as well as the consumers to plan in these uncertain times. So they may draw back and be a little bit more spot here in the first quarter, first couple quarters. Can I maybe just add, Heather, that our I think it's delta year over year right now is in ocean freight and really driven primarily by, you know, lower flat price now versus a year ago. But those markets can get very dynamic, you know, depending on trade flows. As government policy gets more clear and trade flows could be impacted, that certainly may provide us some opportunity on the ocean freight side. One supply and demand probably is it's, most to be watched probably is corn. That one's probably the tightest. And so if we did have some weather problems in corn production, that's one of the ones that could contribute to merchandising as we need to work to solve some problems globally.

Okay. And then I don't know how much y'all can speak to this, but I just wanted to ask broadly, your thinking on the Viterra acquisition and all, given... The Greek model makes canola basically uncompetitive coming into the U.S., or at least not eligible at this time for a credit. And just the potential for export tax for tariffs on Canada, just like broadly, how are you thinking about that acquisition now versus, you know, maybe a year ago? And are you maybe able to offset some of those new negatives with greater synergies or a greater share repo? Or just how are y'all thinking about those puts and takes?

I'd say that, you know, one, it hasn't all played out exactly what, you know, how the biofuels policy is going to work out. But remember, canola is very favored by the food industry. as well as the canola meal has been very favored by the dairy industry. So that market will continue to go to a lot of the traditional demand. As you can imagine, obviously, we're watching what happens between the U.S. and Canada because that pitted back canola flows in the near term. But that will last forever. This is a long-term game, so clearly we'll be poised to deal with whatever we need to deal with in the near term. But I think long-term, you know, as policy gets more clear, one thing is the market will adjust to that. And I think, you know, with the combination with Viterra, we should be in a better position globally to deal with whatever disruption might be created from government policy or trade flows changes.

Okay, perfect. Thank you so much.

Thank you. And our next question comes from Tom Palmer with Citi. Please proceed.

Good morning, and thanks for the question. I wanted to maybe just start off kind of framing the earnings guidance for 25 relative to the 850 mid-cycle outlook. I know it's a few years. It was laid out in 22. I appreciate interest expense is higher, but share count's lower. So I guess just looking at like the segment profit pieces could we maybe walk through expectations relative to that mid-cycle outlook?

Sure, Tom. I'll take that. And, Greg, you can jump in if you have any other thoughts. But, you know, just a reminder, we put that together. You know, our most recent refresh was in the middle of 2022, which, of course, seems like an eternity from now. But overall, how we're thinking about it, on the processing side, the margins are pretty steady versus what we had assumed back in the mid-cycle, but volume is down based on our original model, really driven by three factors. One is Ukraine has obviously been impacted with the war, and so pretty much lower volume levels there than really anticipated. We sold our Russia business since that point in time, and then we're doing less foaling in South America. So volume is down in processing, but margin's fairly steady. Merchandising side, really assume lower volatility going forward. We had modeled about $100 million a quarter in our baseline. And looking at the next year, we're thinking somewhere in the $50 to $75 million per quarter range. So obviously, that can change pretty quickly, depending on what happens in the markets. But that's how we have it in now. you know, net interest expense higher and, you know, really driven by interest rates and more debt. And I'll get to the offsets in a second. And then on the sugar side, of course, we sold sugar and we had that built into the model. But offsetting the higher interest in sugar impact is more share buybacks. And, you know, we originally in the model just assumed that pay down with any excess cash. But of course, we've allocated a lot of that to share repurchases. So repurchases have principally offset the loss of sugar earnings and the higher interest costs. And then we do have some higher costs, you know, than what we had anticipated at the time, really driven by growth initiatives, you know, and adding some capability, investing some money in technology, really to drive efficiency in the future. And frankly, inflation, you know, over the last couple of years is higher than what we expected in our original model. And then finally, on the favorable side to all that is on RSO, you know, refining specialty oil side, margins have been better than what we would have modeled in terms of at the time, assuming more of a baseline. You know, on the specialty side, we performed better, but also refining premiums have stayed better than, you know, what we had anticipated in the mid-cycle. So that kind of wraps up the overall. Probably just for mentioning, Lloyd was mentioning the calendarization issue. of 25 right now. So first half, second half at 40%, 60%. And then Q1 versus Q2 on the first half would be 40%, 60%. Thank you.

That was actually my next question. Maybe I'll just sneak one in quickly. Just on Jatera, I guess, what's kind of the plan once it closes in terms of communication is the idea to update guidance just on the next earning cycle? Would it be more proactive than that? And just, just any kind of initial thoughts on how we might maybe think about Viterra swinging earnings. Thanks.

Yeah, I think Tom, our plan right now is to update on the Q1 call. You know, obviously it depends on timing of close because we have a lot of work to do in the commercial teams together and looking at the future. Um, You know, we focused all of our time and attention on integration and getting to regulatory. And, of course, you know, given the fact that we're not one company, the commercial teams are limited in communication, really limited to integration discussions and not what can we do together going forward. So we're looking forward to getting those teams together to talk about the future, what we can do together. And clearly our first order of business will be, taking a recast of how we feel about the balance of 25 post-close, and then we'll share that as soon as we can. You know, in the meantime, we're excited about it. We know we're in a very cyclical business. You know, the environment's different than it was when we signed the deal, but this is about the long term. And we're just as excited today as the day we signed the deal. And, you know, knowing the long run as we've had a chance to spend more time with our teams, really excited about what we can do together, especially in a world that seems to be more geopolitically uncertain and whether volatility and all the things that could play well into our model, it's going to give us that much more ability to manage.

Great. Thanks for such detailed answers, guys. Yeah, you bet.

The next question is from Stephen Haynes with Morgan Stanley. Please proceed.

Hey, good morning. Thanks for taking my question. I wanted to ask on the VITERA regulatory process, you mentioned some constructive comments with Chinese regulators. I was hoping if maybe you could provide a bit more color here on those discussions. And then is it also, I guess, fair to assume that any back and forth between the U.S. and China on tariffs hasn't changed anything with those discussions? Thank you.

Yeah, I'd say we've had very productive discussions with the Chinese authorities, and we can continue to respond to the questions and work through the process, and we feel we're getting to the later stages of that. And then as far as some of the external factors that are going on in the world, the one thing only with our global footprint, as well as Viterra, with their global footprint, we've both had very good relationships with the China market, with our counterparties in China, with the regulatory authorities. And these are decade-long relationships. And it's very important to be able to connect that important demand in China with the farmers. And that's what we do. That's vitally important to help farmers be successful and to be profitable and continue to grow, as well as it's important to China for their growing demand, that we can connect them to all the different origins around the world. So those are long-term relationships and trust that's been built, and we'll just work through the process. We've seen a lot of different cycles and a lot of different situations in the world and relationships over those decades and expect to in the coming decades, which is why we're so excited about putting these two companies together.

Understood. Thank you very much.

The next question comes from Salvatore Tiano with Bank of America. Please proceed.

Thank you very much. Firstly, I want to talk a little bit in more detail about the financial implications of the acquisitions that you're close to completing. So firstly, on Bytera, previously you had said that it most likely would be dilutive on year one. And I want to see if you can put a finer point, given that at this point we're close to the the completion and also if we have line of sight to year two or year three whether this will be at this point dilutive or accretive and on cj select i think numbers that have been floated previously we're talking about perhaps 60 million ebit contribution which would be 30 cents cps accretion on a full year basis is this still the case i'll start with by tara uh you know the

Out of the gate, it was going to be neutral to slightly positive on a pro forma basis after any consideration capturing first-year synergies and share buybacks. Of course, we've done a bit of the share buybacks. We have $800 million remaining on that program. But I think, look, it's difficult to assess exactly how it will have an impact first year because we haven't gotten together to put a forecast together for 2025. Again, we will provide that clarity as soon as we can on 25, and then really an outlook beyond there. We have to spend some time together and understand how the businesses will work together and how quickly we can capture the commercial synergies. I think on the cost synergy side, we feel very good about the cadence that we have, but it'll take time to get through the commercial side. So we'll work on that. I think it's a big company. It's a lot of work. We'll provide that clarity as soon as we can. With respect to CJ Selecta, our general assumptions are largely intact on that. It's about a $600 million acquisition, and we expect mid-teen returns on that business. And so that there holds long-term, certainly. We believe that's a great acquisition. And while any given quarter or year, S&Ds can margins, you definitely believe that is going to be a very good acquisition over the long term.

Perfect. Thank you very much. And also, I wanted to check a little bit on the capital allocation. So, obviously, you are being more aggressive with buybacks and offsetting the dilution from the sale of the sugar JV. How should we think a little bit about that for this year? And on CapEx, I think previously you had mentioned around $2 billion for 2025. So currently it's trending lower. And is this just finding efficiencies, taking off some projects of the books, or just being pushed back to 2026? Yeah.

So with respect to share buybacks, as I mentioned, we have $800 million left on our commitment relative to VITERA. The original commitment was doing that within 18 months of close, and certainly that could come sooner, if it makes sense. And as we look at other sources and uses of cash, you know, we're always looking at buybacks as an option for any excess cash that we're generating. With respect to the CapEx estimate, we're nearly at 1.92, and now we're down 1.5 to 1.7, driven really by kind of 50-50 between some timing pushing into early 26, and our decision to forego some projects that we had on the slate that we decided not to pursue. So kind of a mix between the two. So overall, I think 1.5 to 1.7, we feel like it's a pretty good estimate for next year, down $200 million to $300 million from our original forecast.

Great. Thank you very much.

The next question is from Poran Sharma with Stevens. Please proceed.

Thanks for the question. Just wanted to hop on and get a sense of the take or pay. Just want to get some granularity here. Now, you said you're expecting better results out of South America because you won't see as much of an impact. I'm just wondering, in 2024, did you see – was the impact – kind of centered around the first half or the second half, or was it split evenly throughout the year?

Yeah, first I'd say it was a total industry impact that fortunately affected margins, not only in origination and crush, but in our exporting as well. And it was really something the industry struggled with all year. Okay, they've accelerated a little in Q4 as the as the end of the year. Definitely, you know, approached and, you know, we felt it across our system in beans and corn, but definitely in our global corn business as well.

Got it. Appreciate the color there. Guess on the follow up, just want to get a sense of potential trade I know the situation is fluid now, but just, you know, looking at past history, last time around, Bungie South America business, at least the fundamentals were much better because it looks like flows shifted over from China to South America. So just want to get your sense on the setup this time around. If you do get tariffs in place, do you expect to see as much of a benefit in your South America business? If you could just help me understand the puts and takes there.

Yeah, one thing that I would point out as you think about it versus the challenges in the trade war in 2018, Fungi is a very different company. The way we operate, the global platform and the way that we've changed our operating model, I think we're much better positioned to react more quickly to the challenges and or opportunities. And we've made some improvements in the platform, right, in our asset platform. So we've got more capabilities from that standpoint as well. So that's the differentiation I would draw from 2018 to 2021. today and what we'll be dealing with here in 2025. And the other, we're a little bit battle-tested when you think about some of the things that we've been challenged with, whether it's African swine fever or geopolitical, you know, regional situations, COVID. And the team's performed very well through all of those. So I think we're in much better position from the capabilities and from a platform for the challenges that are in front of us. I might just add that obviously we're used to supplying China out of both North and South America, depending on the time of year. Harvest in the U.S., we supply a lot of beans out of the U.S., and then that shifts to Brazil or South America later in the year. And so it's very much a dynamic that we're used to. And so if trade policy affects trade flows, we'll be able to adjust to that accordingly, given our experience. China, as Greg pointed out earlier, for decades. Look, our goal ultimately, right, is to connect those demand markets with the farmers and send the appropriate signals, right, for planting decisions that the farmers are making to be able to have, you know, the right crops and drive their profitability.

Got it. Appreciate the color, guys.

The next question comes from Ben Thur with Barclays. Please proceed.

Good morning, Greg, John. So just wanted to follow up on one of the questions that's related to what Tom had in terms of like the baseline and kind of like tie that back into from what obviously you've shared already during the call. But I remember back roughly two and a half years ago, you also presented some of the impact that you're expecting from, A, growth capex and, B, M&A versus share repurchases. So I think we've discussed the M&A and share repurchase piece around it. But could you maybe also elaborate, just given the increased capex that you've been seeing and what you've been putting out already last year for this year and then that's probably even going to carry over into first half 2026, of what do you expect from that in terms of contribution as to your – Let's just assume it's still the same baseline. What would that be? What's that incremental earnings that you think that can come out of that capex as you roll over into then the second half of 26 and then beyond then to 2027 in a more normalized capex cycle, but with those assets being produced?

Sure. So our baseline assumptions, we built our go-forward model was really built around CapEx and M&A, small amount of M&A, mostly large CapEx. And those projects are largely on track. Timing's been a little affected by weather and labor availability on a couple of them, but largely intact with our long-term game plan. And obviously, what the environment is like when those projects finish will impact maybe the near-term economics of those projects, but And then CJ Selective, for example, is one of those projects that we had had on our radar screen back when we built the model. And that hopefully will close here soon. So I feel like, you know, we're largely on track on the growth side with what we modeled. And we had anticipated that impacting about $2.50. So we were expecting about $11 baseline, you know, all else being equal in our baseline from $8.50 to $11. Now, Obviously, what the environment's going to be like at the end of 2026, you know, when we largely expect these projects to be wrapped up, anyone's guess at this point, but assuming, you know, a mid-cycle or relatively mid-cycle environment at that point, that's what we would expect our baseline to have reset to.

Okay, perfect. And then just real quick, as it relates to the cadence, how to think about share buybacks. I mean, obviously, you've done about $1.1 billion now as of December. So that means there's still around about $900 million missing, which is within the Bytera deal. Is that still more likely now to happen post-transaction close? Or would you continue to buy shares even ahead of it, just given the liquidity you have right now post the sugar closure?

Yeah, so we have $800 billion left. And while we haven't made any specific decision on when, but certainly it will be opportunistic. We'll get it done. But the cadence haven't really settled on when, but certainly we will. If it makes sense to do it sooner, we'll do it sooner. But if we have other reasons not to do it right away, we'll consider that. But we'll get it done for sure.

Okay. Perfect. Thank you. I'll leave it to you.

Our next question comes from Tammy Zakaria with JP Morgan. Please proceed.

Hi. Good morning. Thank you so much. So my question is on the disaster aid package for farmers that was – U.S. farmers that was announced in December. I think they're getting assistance per acre for both corn and soybeans. Do you see any potential benefits of any of this for any of your segments benefiting from this as the year progresses?

I think it's kind of a small impact to us overall. I think the upside and what's good is that farmers will have – what they need to make the investment in this next crop in the seed and the inputs, you know, to plant the right crops and have the right productivity. So, you know, it's good that they've got that funding and I think that support is positive and that should be good for production.

Got it. That's helpful. And I wanted to follow up on that tariff question from earlier. Um, I know it's still fluid, but there's a narrative that, uh, increased exports of more ad commodities out of the U S into some of the trading partners, like, like China, uh, could be a negotiating tactic under the current administration. Uh, so given your footprint, how would that impact your outlook? If, if let's say China promises to buy more from the U S maybe at the expense of South America.

Yeah, one thing, we're very glad that we have a very balanced global footprint. So whether that's on the merch side or on the crushing, the oilseed processing side, we've been able to balance a number of situations the last few years to continue to perform. It may create regional trade-offs like in the U.S. where that would benefit export and it may be slightly more challenging to crush, but then we would try to adjust elsewhere in our global system to respond to that.

Got it. Thank you. That's helpful.

And our next question comes from Derek Whitfield with Texas Capital. Please proceed.

Good morning, and thanks for taking my questions. Starting with... Starting with refining, we've seen the spread between RBD, SBO, and crude SBO collapse to historically low levels. With the understanding that the majority of refiners are buying crude versus refined, where should this market settle out once demand returns, as I can't imagine refining costs are less than two cents per pound?

I guess I'd start by saying we all along said that as the pretreatment got built in renewable diesel, we expected to see some of the margin move from the refined into the crude. We've definitely seen that, so the crude will carry a bigger piece on the crush. We've got a little bit different footprint with our global specialty oils business. Got a very good customer base that we've continued to help manage their challenges and grow with. We've got a nice balance between the QSR as well as the CPG and the food at home. So our account mix has been favorable as we've seen some of the changes with the consumer. And then some of our specialty business on the oil side benefited from the tight cocoa butter supply. As well as you remember, we added a plant at Avondale, and as we ramped that up in our capabilities here in North America on specialty oils. So kind of all that rolls into when you see what our refined overages are. We've probably got a little bit different package or portfolio than what someone who might just be a North American player. Derek, I'd just add that... While the storyline, a lot of it's about energy and crude versus refined oil, the energy sector, we supplied less oil this year, not only as a percentage of our total book, but also just in actual volume. We provided less to the energy industry just because demand has been soft with all the uncertainty. So that could be upside in the future. It obviously would be upside in the future if policy gets clarified and And we think demand for soybean oil, whether refined or crude, is good. Either way, we want demand for that product. But refining premiums have held in there pretty well. And to Greg's point, it's been very resilient with the demand, the elastic demand from the food industry. And I think it's probably also worth mentioning, right, there is a big biofuel install base that exists now. It's in place. So as we work out you know, the RVO and Workout 45Z, there's a lot of demand there that could make a difference in a hurry. And, you know, we trust that the policy is going to get worked out, right? There's a lot of installed capacity. The money's already been spent. It's available today to run. And those facilities, whether it's traditional biodiesel, renewable diesel, or SAF, they're underutilized today. And, you know, we get those policy rights. That's also supportive to to agriculture at the farm gate that's supportive to the farmer and we think we're going to get you know eventually get those dots connected and we hope that'll be later here uh this year but that installed capacity base uh is there and uh john said we've got upside on the amount of oil that we can that we can provide when they're ready to go great we definitely agree with that assessment as well and then as my follow-up i wanted to touch on 45z

In your view, is there merit from a carbon counting perspective for canola to have a materially higher CI than SBO when you evaluate ag and processing practices?

Yeah, look, I'm not a scientist, so it's hard to understand all the math that goes into it. You know, today it doesn't have a path. Obviously, the one we're watching more closely is winter canola because we have no program. and think that obviously the scores there should be considerably different, especially when you think about indirect land use. TBD, the policy did make note that it was spring canola that they had assessed, and so we're hopeful that they'll be reviewing winter canola and treating that differently. Today that's flowing to Europe, because there is demand in Europe for winter canola seed, and our program here in the U.S., it's growing. We'll see how things shake out. I mean, there's going to be a lot of conversation, certainly. But one thing we do know is that we'll be positioned to support wherever this stuff needs to go. And today, some of it's Europe. Clearly, 45Z came out. It was more favorable to soybean oil. But we do think winter canola has a place, as well as some of the other novel crops that we continue to work. And I'd say what's encouraging is that we're seeing – you know, the players along the value chain work together with the policymakers to try to get, you know, the same set of facts for everyone to work together. So whether it's the energy industry, the processing industry, the farm groups, you know, we are seeing everyone try to engage on the facts, and we believe that that will be productive over the long term.

Perfect. Thanks for your time.

The next question is from Andrew Strelzyk with BMO. Please proceed.

Hey, good morning. Thanks for taking the questions. I had two questions. The first one about some of the near-term uncertainties that you've been discussing and you have cash crush that looks pretty poor versus a crush curve that gets better throughout the year. What's your degree of confidence or how do you weigh the risk that maybe some of these uncertainties kind of linger beyond the first quarter? Is there a degree of confidence that this will be more confined to the quarter, or how do you balance those two in your outlook?

I'd say when you look at the calendarization, you know, that we put together with, you know, delivering, you know, the 775, right, we talked about that's approximately. So, you know, we see scenarios where that's got risk and upside, right? We look at where we're at right now in the cycles of harvest. We've got a second quarter. The first quarter is going to be pretty tough. Second quarter, we'll start to see some benefits from South America. And then as we get in the second half of the year, of course, from North America crops. So I think that's reflected in that expecting 40% of our earnings in the first half. And it's even more reflective when you think about in the first half, we're only expecting of that 40% for 40% of that to be in the first quarter. So that calendarization kind of shows, you know, what we expect to, you know, to roll out. And then the caveat around that being tariffs and possible retaliatory measures. So the point they'll, you know, benefit one region and we'll have to manage that from another region. The one thing that it does, it makes planning tougher and it may drive not only farmers but consumers more into the spot. That could make things, you know, delay a little bit more. So that'll be one of the, I think, factors to watch in 25. You might just add that I know we've talked a lot about mobiles, but Some additional certainty around where things are going to shake out from a renewable standpoint could have a significant impact on demand for soybean oil. Greg pointed out the assets are there, the capacities are there to boost. These plants are significant. They're able to take a significant amount of volume, soybean oil, when they're running and running hard. That could change the dynamics pretty quickly. But again, policy uncertainty, people are very reluctant to book forward. And I think that's reflective of the cash markets is a lot of hand to mouth right now on that side because people don't have enough conviction to . The other course is watch the weather right now. Looks favorable for Brazil and how the harvest should develop there. It's a little dry in Argentina, so we want to watch that closely. And then remember, meat economics are very good, and the animal numbers are out there. Soybean meal priced very well, less competition from wheat and from the mid-pros, and so we're at high inclusion rates on the meal side. And then John spoke to the fact about there's a lot of biocapacity out there and regulatory clarity is on the way, we hope, there in the second half. And then don't forget globally why we've got a lot of uncertainty in the U.S., right? Brazil's got fuel of the future. They'll be moving up to B-15 on their way to B-20. Indonesia's talked about going from B-35 and on their way to B-40. And then Europe has put some more favorable regulation policy in place for SAF and started to move towards maritime. So there's a lot happening globally on the biofuels continuing to kind of quietly develop demand and investments continue to move forward.

Okay, that's super helpful, Culler. I appreciate that. And my other question, you know, I guess I appreciate we just got the 2025 guidance, but I'm trying to think about the earnings trajectory of this business over the next, I don't know, two or three years, next several years. And obviously this year has a lot of disruption. lot of kind of rebalancing um and then you have you know everyone can make their own assumption on kind of the pro forma numbers with the terran cj selector but you know then you have synergies and you have you know returns on these capital projects and maybe less uh a lack of visibility going forward do you see 2025 as an earnings base maybe on a pro forma basis that you should grow from over the next several years or kind of like a troughish type of number and You know, maybe help us with if there's any of the building blocks that I left out, kind of how you think about the trajectory of the business over the next couple of years. Thanks.

Let me start. The one thing would be yes. And that's because think about, you know, we're excited about bringing, you know, Viterra and Bungie together. But I'll tell you who's really excited are the teams, right? They're engaged and they're anxious. You know, we continue to be competitors, and so the commercial teams have not been able to do that planning. But we're excited about the commercial synergies when we're able, you know, to get those teams together and start to do the work as one bungie here into the future. So, you know, from that, that's part of where we are building off of. And then that will also provide the cash for us to continue to invest as we go forward.

Great. Thank you very much.

This concludes today's question and answer session. I would now like to turn the conference back over to Greg Heckman for any closing remarks.

So thank you very much for joining us today. We appreciate your interest in Bungie and we look forward to speaking to you again soon. Have a great day.

The conference is now concluded. Thank you for attending today's presentation and you may now disconnect.