Fertilizer Overview DREW BURKE, CFO, BUNGE LIMITED 1 2012 BUNGE INVESTOR DAY
Forward-Looking Statements Today s presentation includes forward-looking statements that reflect Bunge s 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 file with the SEC concerning factors that could cause actual results to differ materially from those contained in this presentation and encourages you to review these factors. 2 2012 BUNGE INVESTOR DAY
Business Update Volumes and margins improving with seasonally stronger South American buying period and strong farm economics Expect segment to recover first half loss Markets sending price signals to South American farmers to expand acreage and increase use of crop inputs in 2013 3 2012 BUNGE INVESTOR DAY
Bunge Fertilizer Operations U.S. NPK wholesale Morocco JV Acidulation plants Phosphoric Acid/MAP/DAP/TSP production plants Brazil NPK blending & distribution SSP production plant Port operations Argentina NPK blending & distribution SSP production plant Nitrogen production plant 4 2012 BUNGE INVESTOR DAY
Bunge Argentina Fertilizer South America Ramallo SSP and Port Facilities Campana Nitrogen Industrial Facilities Volume 2011 Total: ~1 mmt Import + National: ~47% Own Production: ~53% Blending / Distribution Facilities Production Facilities Ramallo SSP Campana Ammonia, Urea and Liquid Fertilizers 5 2012 BUNGE INVESTOR DAY
Argentina Fertilizer Market Fertilizer Market Evolution Million of metric tons Main Crop Profile 2012e Million of metric tons 4 Wheat 3 Corn 2 1 0 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12e Soybean Sunflower Others 0 0.2 0.4 0.6 0.8 1 Source : ANDA; Bunge analysis 6 2012 BUNGE INVESTOR DAY
Bunge Brazil Fertilizer Brands South America Sales Mix by Crop Corn Soya Sugarcane Coffee Other Wheat Cascavel Blending Unit Volume 2011 Total: 4,6 mmt Import: ~65% Domestic: ~35% Santos Terminal (operated by Bunge) Facilities Blending / Distribution Facilities (21) Storage/Transshipment Facilities SSP 7 2012 BUNGE INVESTOR DAY
Transitioning the Brazil Fertilizer Business to Standalone Operation Bunge Brazil Market Share (million metric tons of NPK) 22.4 22.4 Sale of mines 24.5 28.3 Brazil Market Bunge Share 29.3 Following sale of mines, distribution business was not structured to operate efficiently as a standalone business Volume focused Facility gaps High cost structure Long inventory pipeline 25% 25% 18% 16% 16% 2008 2009 2010 2011 2012e Actions Enhanced risk management Rationalized physical footprint Filled management and skills gaps Reduced cost structure Increased integration with Agribusiness Sources: ANDA / Fertilizer Market Intelligence 8 2012 BUNGE INVESTOR DAY
Summary Argentina operations performing well Brazil operations improving cost reductions, improved risk management, higher volume Fertilizer is an important element of originating crops for agribusiness in South America Provides added benefit of insight into crop production 9 2012 BUNGE INVESTOR DAY
Financial Overview DREW BURKE, CFO, BUNGE LIMITED 10 2012 BUNGE INVESTOR DAY
2012 Financial Highlights 1st Half 2012 Overview: Good Start, But Results Mixed 2nd Half 2012 Outlook: Expecting Good Finish to Year Capital Structure: Strong Financial Position 11 2012 BUNGE INVESTOR DAY
Bunge Limited 2012 Jun YTD Earnings Highlights Volumes (mmt) 65 76 Jun 2011 Jun 2012 YTD YTD Agribusiness volumes up 22% reflecting new investments Agribusiness benefitted from strong performance in South America EBIT ($m) (1) $653 $447 Sugar & Bioenergy impacted by lower ethanol margins and delayed harvest due to rains Jun 2011 Jun 2012 YTD YTD $3.27 EPS (1) $1.91 Food & Ingredients impacted by lower margins and challenges related to new SAP system in Brazil Fertilizer impacted by lower market prices during Q1; Q2 as expected Jun 2011 Jun 2012 YTD YTD 1. Total segment EBIT and earnings per common share-diluted (excl. certain gains and charges) are non-gaap financial measures. A reconciliation to the most directly comparable U.S. GAAP measure is included elsewhere in this presentation. 12 2012 BUNGE INVESTOR DAY
2nd Half 2012 Outlook Expecting good finish to the year Expect strong processing and merchandising performance driven by South America in Q3 and North America and Europe in Q4 when harvests commence Sugar & Bioenergy improving with seasonally stronger period but ATR lower than expected Expect results in Food & Ingredients to improve from 1H levels and perform similar to 2H 2011 Fertilizer is improving with better volumes and margins from seasonally stronger South America season; expect to recover 1H loss 13 2012 BUNGE INVESTOR DAY
Bunge Limited 2012 June YTD Cash Flow Highlights Rising commodity prices increase working capital needs Pace of farmer selling typically picks up Inventories gain in value, resulting in higher requirements to support margin calls on CBOT hedged positions (US$ million) Six Months Ended Jun 30 2012 2011 Funds from Operations (1) $401 $571 Changes in Operating Assets & Liabilities $(3,100) $(307) Cash provided by (used for) Operating Activities $(2,699) $264 1. Represents net income plus adjustments to reconcile net income to cash provided by (used for) operating activities and excludes changes in operating assets and liabilities. 14 2012 BUNGE INVESTOR DAY
CAPEX Allocation by Segment and Category Growth & Productivity Fertilizer Sugar & Bioenergy Cane planting Cogen capacity Foods & Ingredients Refineries Agribusiness Port terminals Crushing plants Maintenance & Compliance (all segments) ~$1.2B ~25% ~20% ~30% ~20% 2012e 2012e net capex of ~$1.2 billion Projects evaluated on strategic rationale and investment return vs. hurdle rate Hurdle rates unique for each business and country For example, crush plant in Canada has a different hurdle rate than similar project in Vietnam 15 2012 BUNGE INVESTOR DAY
Financial Policy Framework Investment grade credit rating is a key element of our strategy to create long-term shareholder value Targeting a strong BBB credit rating by: Deploying internal operating metrics to support our rating Maintaining a strong balance sheet Taking a conservative approach to liquidity management including a balanced debt maturity profile Having a modest dividend policy tracking expected earnings growth Financial planning is based on funding of Capex, OPWC and dividends with internally generated cash M&A transactions to be consistent with credit rating objective 16 2012 BUNGE INVESTOR DAY
Consistent Record of Increasing Dividends US$ per share of common stock 0.385 0.42 0.48 0.56 0.63 0.67 0.74 0.82 0.90 0.98 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 17 2012 BUNGE INVESTOR DAY
Credit Metrics (US$ millions) Year Ending December 31 2007 2008 2009 2010 2011 Total Debt / Total Capital 34% 31% 27% 28% 25% EBITDA (1) / Interest Expense 5.0x 5.9x 2.7x 5.2x 5.6x Total Debt / EBITDA (1) 2.6x 1.7x 4.9x 3.2x 2.4x Our credit ratios have been consistent with a BBB rating 1. EBITDA = Gross profit less SG&A ± foreign exchange gain/(loss) + depreciation, depletion and amortization. EBITDA is not a U.S. GAAP financial measure. A reconciliation to the most directly comparable U.S. GAAP measure is provided at the end of this presentation. 18 2012 BUNGE INVESTOR DAY
Long-Term Financial Targets Company-Wide EPS growth of 10-12% per year (average over 5 years) ROIC = WACC + 2 points Business Segments (average annual volume growth over 5 years) Agribusiness Sugar & Bioenergy Food & Ingredients Fertilizer 5-7% 8-10% 3-5% 5-7% Volume Growth 19 2012 BUNGE INVESTOR DAY
Wrap Up We have the right capabilities for the long-term Geographic balance Diverse product portfolio Experienced team Strong balance sheet We are well prepared for today s market Core capabilities Network Improving returns Driving for best in class performance in Sugar & Bioenergy Extracting more value in Food & Ingredients Building on momentum in Fertilizer 20 2012 BUNGE INVESTOR DAY
Thank You 21 2012 BUNGE INVESTOR DAY
Appendix
Backup: Non-GAAP Reconciliation Below is a reconciliation of total segment EBIT to net income attributable to Bunge: Six Months Ended Jun 30 ($ in millions) 2012 2011 Total segment EBIT $541 $690 Interest income 47 44 Interest expense (144) (142) Income tax (82) (63) Noncontrolling interest share of interest and tax 4 19 Net income attributable to Bunge $366 $548 23 2012 BUNGE INVESTOR DAY
Backup: Non-GAAP Reconciliation Below is a reconciliation of earnings per common share-diluted (excl. certain gains & charges) to earnings per common share-diluted: Six Months Ended Jun 30 2012 2011 Earnings per common share-diluted (excl. certain gains & charges) $1.91 $3.27 Certain gains & charges (1) $0.46 $0.24 Earnings per common share-diluted $2.37 $3.51 1. See the Additional Financial Information section included in the tables attached to the earnings press release for more information. 24 2012 BUNGE INVESTOR DAY
Backup: Non-GAAP Reconciliation Notes Total segment earnings before interest and tax Total segment earnings before interest and tax ( EBIT ) is Bunge s consolidated net income that excludes interest income and expense and income tax attributable to each segment. Total segment EBIT is a non-gaap financial measure and is not intended to replace net income attributable to Bunge, the most directly comparable GAAP financial measure. Total segment EBIT is an operating performance measure used by Bunge s management to evaluate its segments operating activities. Bunge s management believes EBIT is a useful measure of its segments operating profitability, since the measure reflects equity in earnings of affiliates and noncontrolling interest and excludes income tax. Income tax is excluded as management believes income tax is not material to the operating performance of its segments. In addition interest income and expense have become less meaningful to the segments operating activities. Total segment EBIT is not a measure of consolidated operating results under U.S. GAAP and should not be considered as an alternative to net income attributable to Bunge or any other measure of consolidated operating results under U.S. GAAP. 25 2012 BUNGE INVESTOR DAY