Bunge SA(BG) - 2025 Q1 - Quarterly Report

PART I — FINANCIAL INFORMATION Financial Statements (Unaudited) Unaudited statements show decreased Q1 2025 net sales and income, with higher assets and a cash outflow from operations Condensed Consolidated Statements of Income (Loss) Q1 2025 net sales decreased to $11.6 billion, with net income falling to $201 million from the prior year Q1 2025 vs Q1 2024 Income Statement Highlights | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net sales | $11,643 million | $13,417 million | | Gross profit | $597 million | $876 million | | Income before income tax | $284 million | $369 million | | Net income attributable to Bunge shareholders | $201 million | $244 million | | Diluted EPS | $1.48 | $1.68 | Condensed Consolidated Statements of Comprehensive Income (Loss) Total comprehensive income rose to $416 million in Q1 2025, driven by positive foreign exchange adjustments Q1 2025 vs Q1 2024 Comprehensive Income | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income (loss) | $204 million | $252 million | | Foreign exchange translation adjustment | $266 million | $(184) million | | Total other comprehensive income (loss) | $228 million | $(149) million | | Total comprehensive income (loss) attributable to Bunge | $416 million | $104 million | Condensed Consolidated Balance Sheets Total assets grew to $26.7 billion by March 31, 2025, primarily due to a significant increase in inventories Balance Sheet Highlights (Mar 31, 2025 vs Dec 31, 2024) | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $17,373 million | $15,958 million | | Total assets | $26,660 million | $24,899 million | | Total current liabilities | $8,535 million | $7,435 million | | Total liabilities | $15,116 million | $13,954 million | | Total Bunge shareholders' equity | $10,578 million | $9,913 million | Condensed Consolidated Statements of Cash Flows The company experienced a $285 million net cash outflow from operations in Q1 2025, reversing a prior-year inflow Q1 2025 vs Q1 2024 Cash Flow Summary | Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Cash provided by (used for) operating activities | $(285) million | $994 million | | Cash provided by (used for) investing activities | $(280) million | $(396) million | | Cash provided by (used for) financing activities | $490 million | $(259) million | | Net increase (decrease) in cash | $(79) million | $330 million | Notes to the Condensed Consolidated Financial Statements Notes detail accounting policies, the pending Viterra acquisition, asset dispositions, and derivative usage - Effective January 1, 2025, Bunge's Sugar & Bioenergy reporting segment has been reclassified to Corporate and Other, with prior periods restated[27] - The company is involved in a pending business combination with Viterra Limited, valued at approximately $5.0 billion in stock and $2.0 billion in cash[33][34] - On April 8, 2025, Bunge agreed to sell its North America corn milling business for $450 million and its European margarines business for approximately $239 million[41][42] - The company utilizes a trade receivables securitization program providing up to $1.5 billion in funding to enhance financial flexibility[54][55] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses lower Q1 2025 net income, increased working capital, and rising debt to support operations - Net income attributable to Bunge shareholders decreased by $43 million YoY to $201 million, primarily due to lower Segment EBIT[179] - Total EBIT decreased by $105 million YoY to $328 million, driven by lower gross profit in the Refined and Specialty Oils segment[181] - Working capital increased by $315 million from year-end 2024 to $8.8 billion, mainly due to higher inventories for the South American harvest[183][184] - Cash used for operating activities was $285 million, a $1.28 billion decrease from the prior year, driven by funds used for inventory purchases[237] Segment Overview & Results of Operations Segment performance was led by Agribusiness, while Refined & Specialty Oils and Milling EBIT declined significantly Segment EBIT Performance (Q1 2025 vs Q1 2024) | Segment | Q1 2025 EBIT | Q1 2024 EBIT | % Change | | :--- | :--- | :--- | :--- | | Agribusiness | $270 million | $278 million | (3)% | | Refined and Specialty Oils | $116 million | $226 million | (49)% | | Milling | $18 million | $33 million | (45)% | | Total Reportable Segment EBIT | $404 million | $537 million | (25)% | | Corporate and Other | $(76) million | $(104) million | 27% | - Agribusiness performance was impacted by lower gross profit in Merchandising, partially offset by favorable foreign exchange gains in Processing[190][191] - Refined and Specialty Oils EBIT decreased primarily due to lower gross profit driven by lower margins, particularly in North America[194] - Corporate and Other results improved due to a decrease in SG&A expense, reflecting lower acquisition and integration costs for the Viterra transaction[199] Liquidity and Capital Resources Working capital and total debt increased while the company maintained strong liquidity and paused share repurchases Working Capital Summary | (US$ in millions) | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $17,373 | $15,958 | | Total current liabilities | $8,535 | $7,435 | | Working capital | $8,838 | $8,523 | - Total debt increased by $479 million from year-end 2024 to $6.7 billion, mainly to fund working capital[217] - The company has $5.665 billion in unused and available committed borrowing capacity under its revolving credit facilities[214][215] - No shares were repurchased in Q1 2025, with approximately $800 million remaining authorized under the existing program[234] Quantitative and Qualitative Disclosures About Market Risk The company actively manages significant market risks from commodities, currencies, and interest rates via derivatives - The company's primary market risks are from agricultural commodity prices, transportation costs, foreign currency exchange rates, and interest rates[244][245] Commodity Position Market Risk Analysis | (US$ in millions) | Value | Market Risk (10% adverse change) | | :--- | :--- | :--- | | Highest daily aggregated position value (Q1 2025) | $481 | $(48) | | Lowest daily aggregated position value (Q1 2025) | $(38) | $(4) | - A hypothetical 100 basis point change in interest rates would result in an approximate $48 million change in annual interest expense[257] Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[267] - No material changes were made to the company's internal control over financial reporting during the first quarter of 2025[268] PART II — INFORMATION Legal Proceedings The company is involved in various legal proceedings, primarily in Brazil, with specific amounts reserved for claims - The company is party to numerous labor, civil, and other claims, primarily related to its Brazilian operations[271] Reserved Amounts for Legal Claims (as of March 31, 2025) | Claim Type | Reserved Amount | | :--- | :--- | | Labor Claims | $43 million | | Civil Claims | $199 million | Risk Factors The report references the 2024 Annual Report for a comprehensive discussion of business and operational risk factors - The report refers to the "Item 1A. Risk Factors" section in the 2024 Annual Report on Form 10-K for a comprehensive discussion of material risks[272] Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds were reported for the period - None[273] Exhibits Filed exhibits include credit agreement amendments, Sarbanes-Oxley certifications, and XBRL data files - Exhibits filed include an amendment to the Receivables Transfer Agreement, an extension to a Revolving Credit Agreement, and CEO/CFO certifications[279]