01—Abstract
Summary
Summary of the 10-K filed February 22, 2024. Cited figures are marked; the original filing is the authoritative source.
Bunge Global SA (NYSE: BG) closed fiscal 2023 with a strong earnings rebound.
Net income attributable to Bunge rose to $2,243 milliona ($14.87 diluted EPS) from $1,610 million ($10.51) in 2022, and Total Segment EBIT increased 43% to $3,333 million. The gains were driven by the Agribusiness segment, whose EBIT rose 62% to $2,786 million on better processing margins, particularly in oilseed crushing and European softseeds. Net sales fell 11% to $59.5 billion as commodity prices eased from the post-Ukraine-war highs of 2022.
Cash generation improved sharply, with operating cash flow of $3.3 billionb versus an outflow of $5.5 billion in 2022, largely from working capital release as inventories fell $1.3 billion. The company ended the year with $2.6 billion of cash, $5.7 billion of undrawn committed revolvers, and total debt of $4.9 billion. The dominant forward-looking event is the pending acquisition of Viterra Limited, a stock-and-cash deal worth about $6.6 billion in shares plus $2.0 billion in cash.
Sellers (Glencore, CPP Investments, BCI) would own roughly 30% of the combined company. Bunge has secured $8.0 billionc of acquisition financing, which would lift total debt to roughly $16 billion at closing. The deal is expected to close in mid-2024 subject to antitrust approvals, and a $400 million break fee applies if it fails on antitrust grounds.
Credit agencies have placed Bunge on positive outlook or review for upgrade, but the leverage increase and integration of Viterra's previously restated, material-weakness-affected controls are key investor watch items. Other notable items include the November 2023 redomestication from Bermuda to Switzerland, which carries Swiss withholding-tax and capital-management constraints, the sale of Russian operations in February 2023, and a $1.4 billiond remaining buyback authorization.
Management concluded that internal controls were effective. Risks remain concentrated in commodity price volatility, Brazilian tax and labor claims, Argentine macro conditions, and continued exposure to the Ukraine conflict.
02—Key points
Key Highlights
- Net income attributable to Bunge rose 39% to $2.24 billion ($14.87 diluted EPS) versus $1.61 billion ($10.51) in 2022, while Total Segment EBIT increased 43% to $3.33 billion.
- Agribusiness segment EBIT climbed 62% to $2.79 billion on stronger oilseed processing margins, while Refined and Specialty Oils EBIT rose 16% to $865 million.
- Operating cash flow swung to $3.31 billion from a $5.55 billion outflow in 2022, driven by a $1.3 billion inventory reduction and lower commodity prices.
- Pending Viterra acquisition (about $6.6 billion in shares plus $2.0 billion cash) is expected to close mid-2024, lifting total debt from $4.9 billion to roughly $16 billion; sellers would hold about 30% of the combined company.
- Liquidity remains solid, with $2.6 billion of cash, $5.7 billion of undrawn committed credit facilities, and a $1.4 billion share repurchase authorization remaining at year-end.
- Quarterly dividend of $0.6625 per share declared, with total 2023 dividends of $2.6125 per share, following the November 2023 redomestication to Switzerland.
- Net sales declined 11% to $59.5 billion as commodity prices normalized from 2022 peaks, and Milling EBIT fell 59% to $66 million on weaker South American wheat margins.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Bunge Global kept $0.04.
- Revenue$59.54B100.0%
- Cost of revenue−$54.70B91.9%
- Gross profit$4.84B8.1%
- Operating costs−$2.60B4.4%
- Operating income$2.24B3.8%
- Interest, other & tax$-00.0%
- Net income$2.24B3.8%
Where FY2023 revenue went
$59.54B- Cost of revenue: $54.70B, 92% of revenue
- Net income: $2.24B, 3.8% of revenue
- R&D: $35.0M, 0.1% of revenue
- SG&A: $1.72B, 2.9% of revenue
- Other operating costs: $852.0M, 1.4% of revenue
Kept 3.8% as net incomeNet income $2.24B · 3.8%R&D $35.0M · 0.1%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 22, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $59.54B$67.23B | −11.4% |
| Cost of Revenue | $54.70B$63.55B | −13.9% |
| Gross Profit | $4.84B$3.68B | +31.6% |
| R&D Expenses | $35.00M$33.00M | +6.1% |
| SG&A Expenses | $1.72B$1.37B | +25.3% |
| Operating Income | $2.24B— | — |
| Interest Expense | $516.00M$403.00M | +28.0% |
| Net Income | $2.24B$1.61B | +39.3% |
| EPS (Basic) | $15.07$10.83 | +39.2% |
| EPS (Diluted) | $14.87$10.51 | +41.5% |
| Shares Outstanding (Basic) | 148.80M148.71M | +0.1% |
| Shares Outstanding (Diluted) | 150.79M153.13M | −1.5% |
05—Questions
Frequently Asked Questions
What happens to Bunge's leverage and credit ratings if the Viterra acquisition closes?
Total debt is expected to rise from about $4.9 billion to roughly $16 billion after closing, funded by $8.0 billion of acquisition financing plus Viterra debt assumed. S&P, Moody's and Fitch have placed Bunge on positive outlook, review for upgrade, or credit watch positive for potential one-notch upgrades, but the agencies also outlined downgrade scenarios. The company intends to term out much of the bridge financing with long-term unsecured notes, with the outcome dependent on market conditions.
What is the financial exposure if the Viterra deal fails?
If the deal is terminated due to failure to obtain certain antitrust clearances, Bunge must pay Viterra's sellers a $400 million fee. Bunge also bears transaction and financing expenses regardless of completion. Management has already incurred $114 million of acquisition and integration costs in 2023 and $16 million of financing fees recorded in interest expense.
Why did Bunge's profits rise even though sales fell?
Net sales decreased 11% because average commodity prices fell from 2022's Ukraine-war highs. However, gross profit rose 32% to $4.85 billion as processing margins improved in oilseed crushing, European softseeds and North American processing. Lower SG&A efficiency was offset by stronger Agribusiness results, and the company also benefited from a $90 million Swiss tax credit and a release of a valuation allowance tied to BP Bunge Bioenergia.
What are the main risks to Bunge's business highlighted in the filing?
Key risks include volatile agricultural commodity and energy prices, adverse weather and climate change, the ongoing Russia-Ukraine war (Bunge retains Ukrainian crushing and export assets), intense competition, and sovereign and currency risk in Brazil and Argentina. The filing also flags material Brazilian tax claims (about $1.1 billion in income tax assessments and $1.5 billion in indirect tax claims) and the Swiss capital-management and withholding tax constraints that follow the redomestication.
How are shareholders affected by the Swiss redomestication and the Viterra deal?
Shareholders now hold registered shares of a Swiss company, which carries 35% Swiss withholding tax on distributions not paid from qualifying capital contribution reserves, along with more limited capital flexibility and Swiss-law shareholder approval requirements for dividends. Existing holders would see their ownership diluted as Viterra shareholders receive about 65.6 million new shares, and Glencore and CPP Investments would gain board nomination rights, which could affect future takeover dynamics.
06—Continue