AGM 2020

May 21, 2020

Welcome to the twenty twenty Annual Meeting for Bunge Limited. Our host for today's call is Kathy Heil, Chairman of the Board of Directors. At this time, all participants will be in a listen only mode. I would now like to turn the call over to your host, Ms. Heil, you may begin. Thank you. Good afternoon and welcome to Bunge Limited's twenty twenty Annual General Meeting of Shareholders. I'm Kathy Heil, Chair of the Board of Directors of Bunge Limited. And on behalf of the entire board, our officers and employees, I would like to thank you for attending Bunge's Annual General Meeting of Shareholders. I'm joined today by the company's Chief Executive Officer and Director, Greg Heckman, the company's chief financial officer John Nepple, and the company's corporate secretary Greg Bill Hartz. Due to the implications arising from the global novel coronavirus pandemic, we are hosting our meeting virtually via the Internet. At today's meeting, following the introduction of the members of our Board of Directors, we will conduct the formal portion of the annual meeting followed by a question and answer session. I would now like to introduce you to the other members of our board who are attending today's meeting. Sheila Bear, Vinita Bali, Carol Browner, who chairs our Sustainability and Corporate Responsibility Committee, Andrew Ferrier, who chairs our Human Resources and Compensation Committee. Paul Friedberg, Eric Freewald, who chairs our Corporate Governance and Nominations Committee. Bernardo Hess, Jay Winship, who chairs our audit committee, and Mark Zenek, who chairs our enterprise risk management committee. All of the members of our executive leadership team are also joining us for today's meeting. Representatives of Deloitte and Touche, our independent auditors are also present today and will be available to answer appropriate questions during the question and answer session of the meeting. Finally, the company has appointed Broadridge Financial Services as inspector of election, and Tony Caradillo, a representative of Broadridge is with us today. I will now call the twenty twenty Annual General Meeting of Shareholders to order. I'll be serving as the chair of the meeting and Greg Bill Hartz will serve as secretary of the meeting. Greg will now begin the formal matters of today's meeting. Greg? Thank you, Kathy, and good afternoon shareholders. We will now conduct a formal business as set forth in the notice of meeting and proxy statement, which was mailed to all shareholders of record as of 03/26/2020. On or about 04/08/2020, Bunge shareholders as of the record date were sent notice of the annual meeting along with a proxy statement and request for proxy by the Board of Directors. The notice of annual meeting also stated the date, time and meeting purpose along with the web address for participating in today's virtual meeting. I'm pleased to announce that there are present by proxy a sufficient number of the voting shares of the company to constitute a quorum. Accordingly, this meeting is duly called to order. A copy of the notice, the proxy statement and the form of proxies, as well as an affidavit of distribution of Broadridge Financial Services shall be made a part of the record of this meeting. As a reminder, shareholders attending the virtual meeting can vote their shares online from now through the closing of the polls by logging on to the meeting website as a shareholder and clicking the Vote Here button on their screen. If you have previously voted by proxy and do not wish to change your vote, your vote will be cast as you previously instructed. No further action is required. At this point, the polls are now open for voting. We will close the polls after the proposals have been presented. There are four proposals to be considered during this meeting, all of which were described in detail in the proxy statement that we furnished to shareholders. The first item of business is the election of the 11 directors named in the proxy statement for a one year term. The second item of business is to appoint Deloitte and Touche as the company's independent auditors for fiscal year 2020 and to authorize the audit committee to determine the independent auditors fees. The third item of business is an advisory vote to approve executive compensation. And the fourth item of business is an amendment to the Bunge Limited 2016 Equity Incentive Plan. This concludes the presentation of the items of business that you have been asked to vote on at today's meeting. The polls are now closed. I have received preliminary voting results from the Inspector of Elections based on the proxy received as of the opening of the polls at today's meeting. I am pleased to report that all 11 director nominees have been elected and that proposals two and four have been approved. Proposal three was not approved. Final voting results will be reported in a Form eight ks that the company will file with the Securities and Exchange Commission within four business days following this meeting. This concludes the formal portion of our twenty twenty Annual Shareholders Meeting. I'll now turn the meeting back over to Kathy. Thank you, Greg. I would like now to open up the meeting to general questions regarding the company. Shareholders who would like to submit a question may do so through the web portal. Please note that Greg and I will attempt to answer as many questions as time allows, but only questions that are germane to the meeting. Us take a minute to assemble the questions. And then when we're ready, we'll take the questions. We have a few questions that have been submitted by shareholders. First one, Mr. Heckman, would you please provide a short summary of the strategic position of competitors, Glencore Agriculture and COFCO International, please? Yes. Both Glencore Agriculture and COPSCO International are global players with regional strengths. Glencore has a larger presence in Canada and Australia after their acquisition of Viterra a few years back. And then they've got strength in the Black Sea. I should probably mention the parent of COFCO International, COFCO China has a very large presence in the China crushing and downstream oils. And COFCO International has been very active over the years, last few years in Brazilian origination through their acquisition of Noble and Nidira with a focus on exporting beans to their China crush operations. Both Glencore and COFCO International have a presence in Argentine crush and neither have large presence in The US. Mister Heckman, we have another question. Does the announced sale of Bunge's US grain elevators include any barge assets? No. We only sold elevators. The barges and actually five elevators are part of our SCF JV and we've retained that. We also retained three elevators to do with our Morristown cluster, which supports our crush value chain. We also have retained four elevators that are in our EGT joint venture that supports our P and W export value chain. We have two more financially oriented questions, which I'll refer to Mr. Nepple, Bunge's Chief Financial Officer. Because of the impact of foreign currency on Bunge shareholders' equity, is ROIC, or return on invested capital, a reliable metric for measuring company performance? Yeah, thanks for the question. I mean, ROIC is looked at as a measure, but like many measures, it's not perfect in and of itself. Given the weakening of our currency over time, our equity has certainly been impacted. And so ROIC, the invested capital portion of that declines as you look at how currency has impacted it. So we look have at ROIC as one measure. But when you have extreme moves in currency like we've experienced over the last three to six months, in particular in South America, it does have an impact on the equity. And so that would tend to overstate performance on invested capital or return on invested capital. So we look at that a number of other ways. We look at return on invested capital with a static assumption on currencies. We also look at other measures like cash flow returns and adjusted returns on invested capital considering, as I said, the static currency. So there are a number of ways to look at it, but we certainly take into consideration the impact of FX. Second question. Considering the rapidly changing market environment due to COVID-nineteen, as well as the large mark to market impact that Bunge had during the first quarter, would you please discuss how Bunge is managing counterparty risk associated with customers as well as with farmers? Certainly. I think first and foremost we should note we have not seen any material defaults across our system. In a time like this when there's a lot of volatility in the market, is important for us to look at not only credit limits but also open market exposure. We look at that on a number of ways. One is we look obviously at the individual customers and the individual counterparties, whether it's a farmer on one end or a customer on the other. But we also have to look at exposure across particular parts of the industry and by country as well, because different countries have or at different points along the COVID outbreak. But the important thing is we look at that holistically, not just from a credit standpoint, but also the market exposure. And we do that because our credit team and our market risk team are one team, and they work closely together. While we have 75 professional credit professionals across across our network, they work very closely with our market risk team as well as our commercial teams to manage exposure. Mister Heckman, what has been done in the field of digital transformation since last year? We have recently launched just this year a truck freight booking application by the name of Vector in Brazil. And this is couldn't have been more timely. Very proud of the team. We really leverage our intellectual expertise, our customer volumes, and of course, our leading asset footprint in Brazil. And we've seen volume. We launched that in mid January and we've seen volume continue to grow with we're on pace for almost half of our volume to be booked now through the app. But it's connected to our systems and, really helping us connect with, our truckers as well as our customers. And we have one last question. Mr. Heckman, McKinsey Consulting recently released a study which quantified the probability of harvest failures and the risks to crop production due to extreme weather events in major production regions. How will this affect a company like Bunge in the future? And can the industry in general adapt and thrive in such extreme conditions? Well, can't speak for the industry. What I can do is speak for Bunge, and Bunge is the infrastructure of the food chain. One of the greatest benefits of our global footprint and our local regional expertise is that when there are interruptions in one region, whether that relates to weather, politics, crop failures, or local economies, we're able to continue to serve our customers. And that's the inherent optionality and strength built into our global system. At this time, there are no further questions. Well, thank you. That concludes the twenty twenty Annual General Meeting of Shareholders. Thank you for being here today, and thank you for your interest and continued support of Bunge. This now concludes the meeting. Thank you for joining and have a pleasant day.