Bunge Limited (BG)

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Bunge Limited (BG)

Q4 2011 Earnings Call

February 9, 2012 10:00 a.m. ET

Executives

Alberto Weisser - Chairman and Chief Executive Officer

Drew Burke - Chief Financial Officer and Global Operational Excellence Officer

Mark Haden - Investor Relations

Analysts

Christina McGlone - Deutsche Bank

Robert Moskow - Credit Suisse

Diane Geissler - CLSA

David Driscoll - Citigroup

Lindsay Drucker Mann - Goldman Sachs

Christine McCracken - Cleveland Research

Vincent Andrews - Morgan Stanley

Kenneth Zaslow - BMO Capital Markets

Christine Healy - Scotia Capital

Ryan Oksenhendler - Bank of America Merrill Lynch

Presentation

Operator

Welcome to the Q4 2011 Bunge Limited Earnings Conference Call. My name is Monica and I'll be your operator for today's call. (Operator Instructions) Please note that this conference is being recorded. I would now turn the call over to Mark Haden. Mr. Haden, you may begin.

Mark Haden

Thank you, Monica, and thank you everyone for joining us this morning. Welcome to Bunge Limited Fourth Quarter 2011 Earnings Conference Call. Before we get started, I want to inform you that we have prepared a slide presentation to accompany our discussion. It can be found in the Investors section of our website, www.bunge.com, under Investor Relations. Reconciliations of non-GAAP measures disclosed verbally on this conference call to the most directly comparable GAAP financial measure are posted on our website in the Investors section.

I'd like to direct you to slide two and remind you that 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.

Participating on the call this morning are Alberto Weisser, Bunge's Chairman and Chief Executive Officer; and Drew Burke, Bunge's Chief Financial Officer. I'll now turn the call over to Alberto, and he'll begin with slide three.

Alberto Weisser

Good morning, everyone. In 2011 Bunge produced strong results in agribusiness, edible oils and milling with a record full year combined EBIT of over $1.1 billion. However, results in our sugar and bio-energy segment were negatively impacted by back to back years of poor weather in Brazil that materially reduced cane volumes and hence our results. In fertilizer we made progress transitioning our Brazilian business to a standalone blending distribution business, but volumes are still behind our targets.

We reorganized the team and structure of the business, improved risk management and filled gaps in our facility footprint. But we are still working on finding the right balance between volume growth and acceptable risk. We expect to get it right in 2012. Slide four, in 2011, we made important investments in new businesses and regions, and took steps to strengthen our core operations. These actions helped position us well for the future.

During the year we entered into joint ventures in palm in Indonesia, agribusiness in South Africa, corn wet milling in Argentina, oilseed processing in Paraguay, and open grain handling facilities in Mexico. Slide five, in our core business we announced the acquisition of food operations in India and Brazil, acquired margarine business in U.S., acquired a new port terminal in grain handling facility in Ukraine, acquired new grain handling facilities in U.S., and expanded sugarcane planting and cogeneration in Brazil.

Slide six, looking forward, we see some challenges but also see very positive signs for 2012, and expect to achieve good results. I feel very good about where we are at Bunge, we have the strongest balance sheet in decades, a superb team, strong network and strong market positions, and an ever growing geographic footprint. This gives me the confidence we will continue growing and performing well.

Now we will turn over the call to Drew who will discuss our fourth quarter financial results in 2012 outlook.

Drew Burke

Thank you, Alberto, and good morning. Let's turn to page seven in the earnings highlights. For the full year Bunge had diluted earnings per share excluding certain gains and charges of $5.80 versus $4.13 in the prior year. Our segment EBIT was $1,154 million versus $3,228 million in the prior year. The prior year included a gain of $2.4 billion on the sale of our fertilizer nutrient business. After adjusting for this year’s gain, our year-over-year EBIT demonstrated strong growth driven by our agribusiness and food and ingredient businesses.

Turning to the fourth quarter, total segment EBIT was $273 million versus $381 million in 2010. The fourth quarter 2010 performance was exceptional. It was driven by our grain merchandizing business which utilized its global network and origination capabilities to supply alternative sources of product necessitated by the drought in the Black Sea. Fourth quarter 2011 volumes of 39 million tons were significantly higher than the prior year and were driven by new investments coming online in our grains and oil seed businesses and higher merchandizing volumes in the Black Sea region.

Our agribusiness EBIT in the quarter was $203 million versus $377 million in the prior year. Decline was primarily due to the reduction in grain merchandizing profits. Oilseed processing results were better than the prior year as higher results in Asia, Europe and South America more than offset weaker results in the United States. Sugar and bio-energy results were a profit $3 million versus a loss of $56 million in the prior year. Our industrial business performed better than prior year on increased volumes and prices. While higher than 2010, milling volumes were negatively impacted by current and prior year weather problems.

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