Bunge Global SA (BG) Earnings Call Transcript & Summary

Welcome back, everyone. Hello, Greg and Rob, thank you so much for taking the time to be with us today. Since Greg has become CEO of Bunge in 2019, he has transformed Bunge's operations across every facet of its businesses, including its portfolio mix, operational execution, risk management and capital allocation. During that time, Bunge's earnings has more than doubled to what was once thought of it being impossible and unsustainable. But Bunge's, of course, on course to deliver yet another near-record earnings and cash flow this year, as well as likely next year as well. Rob was named EVP and Chief Growth and Strategy Officer as of January 1, 2019. Under his leadership, BG has evolved its ESG strategy to incorporate achievable yet ambitious goals, including reduction of Scope 1, 2 and 3 greenhouse gas emissions and total non-deforestation commitments by 2025. Prior, Rob served as Managing Director of Southeast Asia and China, and held a variety of commercial leadership positions in Europe and Asia for Bunge over 17 years. We're happy to have you guys with us. Grateful for the opportunity to gain greater insight to how you will continue to guide Bunge's future.

With that, let me just start off with some ESG questions. Look, the discussion on ESG continues to accelerate, and we've gone through this with a lot of companies, but I think it's important. The vast majority of companies will need to meet a minimum threshold of ESG goals over time, but the most successful ones will differentiate themselves beyond the "table stakes" and develop what we call superpowers. What do you think is Bunge's 2 or 3 superpowers that we should focus on?

One, thanks for having us, Ken. Great to be here. Yes, I'll tell you, I'm really proud of this company, right? And I think a couple of our superpowers, no doubt, are about engagement and innovation. And I think this is a company that's evolved to be over 200 years old, but I think what's really important is we've been really engaged in a lead in sustainability for well over a decade. It's definitely a central part of everybody's business strategy today and continuing to evolve, but we've got a lot of history in that. The other is -- word, I'd say, the superpower, is thinking about economics, right? Because you've got to make change at scale. And so our position in the value chain, connecting our farmers, customers to our consuming customers in the feed, food and fuel industry, we're all stakeholders in this change, and we've got to have that relentless engagement to really understand those needs and to create value and to share it down the chain, from the consumer to the producer, so that the farmer can make those changes to make a real difference at scale, and that's how we've got to make the economics work. And that will take innovation, right? We have to be very creative. There's a lot of change going on in how we drive those solutions from how we manage the data, to how we're able to share that we are making that progress. But it is creating an entirely new world of opportunities in products and services.

On the -- Bunge recently got its GHG emissions reduction targets validated by the science-based targets, and Bunge is working with sector peers through the COP 27 ag commodities road map for a 1.5-degree Celsius pathways. What are your steps you will take to reach that? What are your milestones? How do we think about that in terms of actually executing on that goal?

Yes. Look, it starts with taking a climate lens to everything we do as we think about how we decarbonize our business and help our customers do that as well at both ends of the value chain, but it's everything now. It's in our investments. It's in every CapEx and project. It's in our growth strategy. It's what allowed us, and Rob and his team, to get us in position to put the science-based targets out there where we've got a reduction of 25% target by 2030 in our Scope 1 and 2 as well as 12% in our Scope 3, and we're proud of the progress we're already making. And it's a great achievement. And our level of engagement in South America to help transform the indirect soybean supply chain, and we've done that through investment. We've done that through sharing our technology, through investment in the resellers, even drive our non-deforestation monitoring strategy. And that -- that is absolutely, what we believe, industry-leading and meeting our industry-leading goal of being deforestation free in our supply chains by 2025.

And then just one other question on ESG. How are you performing against your sustainability-linked loan? What are the criteria, and how many infill is this for you guys?

Look, I can take that one. So the -- we're performing -- we set the sustainability loan, our first one in 2019, and we renewed it last year. And the KPIs we've set up are all building on what Greg was just talking about. It's about ensure that we're on path to decarbonizing our business and also supporting all of the forestation commitments. And along those areas where we're making very good progress, and what we've seen through our sustainability practices right here is this is a way to create value in our financing structures. So we're very positive about it. We're making good progress, and we think that this will provide other sort of financing opportunities in the future.

That's great. Just shifting a little bit to -- staying on the topic a little bit, but can you walk us through the Inflation Reduction Act, and which businesses will have the most impact by how much? And how will the IRA play out over -- in the timings?

Look, the IRA overall is positive for Bunge. The framework was pretty well understood when it came out, and there were some details. But overall, it was well received. And with the administration's commitment to reducing emission by 40% by 2030, biofuels is going to have to play a big role. And there were a myriad of tax credits that were part of it that were all supportive, be it the sustainable aviation fuel, biodiesel renewable diesel tax credit, clean fuel production credits, there were a bunch of policy elements in it that were all positive to the industry. And renewable diesel has -- as you've heard Greg touch on -- talk about more is we're looking to drive change, we have to find things that you can do at scale. Renewable diesel is one of the things that is available now that can be done at scale, and this will be really one of the key elements that will lay the foundation towards sustainable aviation fuel. So overall, we think it's very positive. And if you look at it, it just feeds on to our overall demands from customers to provide lower CI feedstock, and that's the essence of some of the partnerships and the things that you've seen announced. The Chevron JV, that is the core of it, is being able to provide lower CI products. And then you've seen we announced [indiscernible], the new JV that we announced in Europe, which is taking care of all around downstream waste oil. So all of these different elements, that is -- at the core of it is around the lower CI products.

And what is your thoughts on the sustainable aviation fuel in terms of when it becomes a reality? Does there need to be more actions taken? What actions will be taken? What way do you think sustainable aviation fuel plays out?

Yes. Maybe I'll start, and I'll let Rob come in. Look, we're not 100% sure how that will play out, but there definitely is a lot of interest. It is such a huge market. We kind of see renewable diesel probably as being a pathway, ultimately to sustainable aviation fuel. In some of the conversations we've had with the energy industry, whether it ends up being supported by policy or it may just be the consumer demands it, so companies may adopt it regardless of that. And/or the consumer may say, hey, we're willing to pay more and make a difference. And that may be true not only in sustainable aviation fuel, we may see that in some of the freight in the over-the-road fuel as well. I don't know, Rob, if you have any...

No, no. Just to add to that, Ken, when I'm talking with customers, be it either the commercial team, the government affairs teams, the sustainability teams, they're all having different thoughts around this but they all see the trends towards SAF. They're all moving in that direction in what shape or the form, and is a driver coming from RVO? Is it coming from mandates? Is it coming from state or federal things? Is it coming from downstream customer commitments? My answer would be probably all of the above in different shapes depending on the customer, who you're talking with. But the underlying economics are -- I mean, the underlying demand for it continues to be there, and we're working very closely with all of them to help meet their needs.

Great. On your last conference call, you referenced structural improvements in volume utilization rates and unplanned. I don't think there's -- unplanned downtime. I don't think this gets enough airtime in terms of what you've actually done. And then we all talked about renewable diesel, and we'll get back to that as well. But can you provide context to where you were 2 to 3 years ago now, and where you think you can get in terms of these either volume utilization rates, unplanned downtime? Some way to be able to dimensionalize what you have done on an operational level and how we could actually think about how it's different?

Yes. Thanks, Ken. It's been a multiyear effort, and it is a really -- a broad effort that started right with the change in the operating model, really creating the common incentives and alignment of our teams with the commercial teams and the industrial teams, really a focus around having the assets up and ready to run when the margins are there, getting the earnings that are at risk until we hedge them off done, and hedging those assets out so that when they're ready to run that we can run them at high utilization rates. It's been looking at instead of approaching it from a regional basis, looking globally at our best practices, at our global KPIs, learning from the best operators and the best plants across the system. And what that has allowed us to do is really focus on those assets and see operational records being delivered across the crush, across refining and across the port. So it's a culture. It's not just one set of our assets. If you look at unplanned downtime, we've reduced it by around 25% in both soy and soft crush. If you look on the refining side, even better because some of the environment refining is -- utilization has improved. But you look, we're up around 60% in soy and around 40% in soft. And then you look at execution, right? We've had 100 CapEx projects greater than $1 million that we executed in 2021, and we delivered them safely, and 95% of them on budget and on time. So the culture now is just -- it's around continuous improvement. It's how do we continue to get better? How do we think about the investments in our interconnectivity and automation and machine learning that not only have our plants run reliably, but at optimal performance. And so we're really excited long term about where digital and investing in technology will take us. In some of the early pilots that we're running, we now have, if you will, a digital plant operator is outperforming our best plan operators. Now it will take time to roll that across our entire fleet, but that's just a systemic change that you get to make and you get to keep like a number of these others. So I'm very proud of what the team is doing.

Is that incorporated when you think about your baseline numbers over time, or is there something here that investors should kind of think of as incremental? And how do you think about that? Just because I think you're spending a lot of time and energy improving the underlying operations.

Yes. No, it's not all in there. This is about embracing that culture of continuous improvement. Some of these things, I said they're pilots. And as we prove them out, then we'll start to communicate them and roll that out as we make the investments. Some of them were the model change and the operating change that we've made. We've communicated that when we updated the baseline, and as we continue to get these other to the stage, many of the things that we have on the fly, we'll continue to communicate what that will mean. But yes, we feel we've got a lot of great projects, programs and additional upside over time.

Great. Obviously, topic du jour, everybody is talking about it, is how do you assess the RVO announcement? How will it affect Bunge industry? And then I'll have some follow-ups, but I want to hear your overarching comments.

Sure. I mean, if you back way out, we weren't even talking about renewable diesel 3 years ago, right? So the first answer is it hasn't changed any of our strategy and investments. It's -- the demand is up and to the right, and the answer is more demand. We also all know that protein had been the driver of crushing margins, and oil had many times been the laggard. Well, we now have new demand for oil, and we've heard from the energy industry that it is very important to their transition in the next 10 to 15 years of liquid fuels transition to lower their carbon intensity because we can deliver it at scale. So it's going to play out. Look, I think that the government historically, as we bring new industries on, they're very sensitive that all constituents are getting met and that it is a process. And we think we're at the front end of that process, and everyone is communicating to make sure as the market sends the signals for supply to be built to meet that demand. The energy industry got out ahead of us on their renewable diesel build, and as an industry, we're catching up. But as far as the RVO, pleased to see it be a multiyear proposal. We appreciate the fact that even beyond the RVO that the EPA finalized a canola pathway as a feedstock for renewable diesel. That's, of course, supportive for our Canadian operations, and it's supportive for the growth of renewable diesel industry.

How does that pathway help you guys? Is it just simply the same way that soybean oil, it just creates a higher canola price?

Additional demand, and it gives the energy industry that confidence that they will have the volume of feedstock that they need so you'll see them continue to go forward on the projects, would be our view.

And Ken, just to the RVO thing. Just one more, just -- we touched on it a little earlier is, it's not a 1:1 ratio for our customers. They're looking at a whole bunch of things in their overall growth. It's -- again, it's the state, it's the federal mandates, it's sustainability commitments. So it's not like if each one of those things goes it's-- there is an exact output on the other side. So it really is just one of the many things that they're using in their calculations. And again, I would think the strategic players in this, they're in, and we're seeing that by the way they're working with us. So we don't see -- we haven't seen a big impact from them at all.

Can you frame how much R&D capacity has come online? How much you still think is expected to come online?

Yes. I'd say we're probably fairly aligned with as the industry sees it. We expect about 5 billion gallons of renewable diesel capacity by 2024. I think the current capacity is estimated to be around 2 billion gallons, and then another 1.5 billion each of the next 2 years. So much of the 2023 is already in construction, so don't -- definitely don't see that changing. And then as Rob said, this is for the road transportation. So SAF and marine and additional opportunities, that's all still yet to play out.

So just in terms of this announcement, have you had to alter any of your strategic plans in terms of building capacity? Or have you adjusted anything because of what happened last week?

No. No, we haven't. And we kind of look at this where maybe some of the fringe players, people that aren't core to the industry may respond or may make different plans. I kind of expect the strategic players in ag and food and in energy. Look, we've been making our analysis for the long term in making our plans, so I really don't affect -- expect that to affect -- sure not affecting us, and don't expect it to affect the strategic players.

Is it fair to say -- so just -- so the peripheral players or the smaller players that may not have the cost advantage as you do, if they don't build, does that actually bode better for the margins in terms of how you think about it going in the next couple of years? Because ankle biters tend to not be great for the industry.

Well, there's no doubt that those of us with the network have a lot of advantages, right. Everything from the cost to build to the cost to operate, to plug it into our origination networks, to plug it into our marketing networks on the outputs. So we definitely do start with an advantage and we made quite an investment over time to get that advantage. So yes, we'll see. But I think the uncertainty probably will have some of those folks take some pause.

If I think about your baseline earnings of the $11, does the movement of the crush margins have any implications to this? What is included in the $11? What's not included in the $11? Does this have any change to it? Just kind of dimensionalize that, because that's obviously -- your stock has reacted, so there's a view that maybe your earnings have now changed dramatically in the last week. Is that the case? Help us out.

Yes, no. Remember, our baseline is mid-cycle earnings. And I think that's why when we show the baseline and as we've moved the baseline, how we have over-earned that based on environment and our ability to execute in the environment that we're in. So when we show the baseline going up over time due to investments, doing the share buybacks, M&A, that's all around mid-cycle. None of the environment that R&D is impacting, the environment based on when pre-treatment would get built out, that's not in there. So as that becomes more clear, then we can make those adjustments, but that's really upside to what you've seen in our baseline.

So just -- so R&D is really not in your -- so the crush margins that you're using in your baseline or even the $11 and even for the next couple of years, the R&D impact is not truly in those numbers? So you're using crush margins that might be lower than what we currently see, is that the way to think that?

Yes. But especially in North America, in soy and canola, much lower than what we're seeing currently. We've really pulled that back to what would be like double-digit returns on building. We also see that being extended, right? Look, it costs more to build things now. It's taking longer to build things. It's not clear how much pre-treatment will be built by the industry or whether we'll continue to provide that refining. But even there, I think we've been very conservative in where we pulled refining premiums back to more historical levels. So I think it's called baseline because it is a very conservative look. And then as it becomes clear as the industry builds out, we'll continue to adjust that. We feel that there's a lot of upside.

So you opened up the door the $400 million that you use for refined oil, have you started to see pre-treatment being built? And what would be the expectation, when that will be developed? I mean, maybe over some undefined time, it will be built, but how do you kind of assess that? And why use $400 million? When you [indiscernible]?

I think there's a few ways to look at it. One, there is when it will be built, definitely some debate on how much will be built and even some of it that has been delayed. And then there's 2 on how it runs and how hard it runs, right? I think everyone's understanding the complexity and the different oils and some of the heavier oils and the effect on efficiency, the effect on catalysts. And this is an industry that's developing and learning, so I think that's why we're confident that we see the refining premium staying very good for the next at least 24 months. But beyond that, in the baseline model, we want to be conservative. So we did pull those back quite a bit for the RSO segment earnings to be around $400 million a year, which, of course, is well below our current run rate.

There was a lot of movement in global crush margins today. Can we talk about what your outlook is in terms of the global crush margins? And maybe we should dovetail some of the -- some of the policies that are out there. You have Argentine soy dollar program out there. You have obviously North American crush capacity expansion coming at the end of 2023. So can you lay out how you think of the global crush margin outlook by any geographies, and kind of intertwine some of these exogenous factors at this point?

Sure. I'd start with overall, it's a very good environment, right? Really led by North America where the U.S., we've got strong demand continues with the pull from food as well as now from energy in general and renewable diesel specifically, and we've talked about that initial capacity coming online. Brazil, we should definitely benefit from what looks like will be a record bean crop coming on. And then it looks like the new administration in Brazil, we'll probably see a shift back to B15. That will probably start in March or April as we get towards new crop to ensure there's not some food inflation around the oil there. Argentina, of course, will continue to be a bit volatile, and that's due to the farmer and the government tension. We've seen the new soy dollar used to drive farmer selling, but that's -- no good deed goes unpunished. I think that's the way to think about that. Now once it's out there, the farmer will kind of wait for the next one. And the weather is a concern in Argentina right now, right? It's been dry, so that will continue to make Argentina fairly volatile as a supplier which generally, there's a benefit to margins in the rest of the world when that happens. If you look at China, hard to manage and demand can get worse. It's really been tough with the Zero Covid policy. We're starting to see what looks like a lightening up of that and an exit from that I think over the next year. And we feel that, of course, will be good for demand and not just -- that's kind of commodities in general. We're starting to see spot margins improve there. Well, there's not much visibility out forward, but things are starting to improve. And then, of course, Europe has the challenge with the higher energy cost. We need the product there, so when there is the opportunity to hedge that out profitably on a net margin basis, we've been able to do that. And when not, it's calling on production from Argentina to be able to serve Europe. So generally constructive. And then if you look at softseed margins, those continue to be supported, #1, by the strong oil demand globally, but also by the uncertainty in the Black Sea. And while we'd love to see that solved in the short term, we don't see that ending in the near term.

So last time with the soy dollar from Argentina, you actually benefited? My understanding of that, right? Is that a -- generally, that tends to be because there's more movement there that you get to capture the soybeans, you get to hold them. And then once you hold them as crush margins come up, then that's when you could crush them. Is that not the way to think about it, or do you have to right get into the market right away?

Yes. Look, here's how we think about Argentina, and we've been there for a long, long time. It's an important part of our global footprint. Our team has probably seen -- we thought we'd seen about every possible scenario. The soy dollar currency, for one thing, with the time limit on it was -- that was a new one, but our team has responded very well. It's an important part of our global system. It's profitable, and it's a contributor under a variety of different scenarios.

And then with China, COVID, you alluded to as COVID restrictions go away, how meaningful could this be in 2023?

Well, we think it definitely can see a pickup in the demand alone. I think the big unknown, right, is how much China has pulled its stocks down in the different commodities and then its outlook of when they want to replenish stock. So you could get some benefit from a couple of areas there if the market gets favorable. And they not only are trying to feed the demand, but also want to replenish some stock. So hard to imagine a situation that it's -- demand is as tough as it's been really the last 12 months. And we've kind of been fortunately for global markets that China's demand was down a little bit, or it could have been probably a much more explosive situation than last year.

And then we always talk about the oil side and the renewable diesel, but meal demand has been pretty stellar actually. How much is it -- how do you think about the soybean meal demand? And how much do you think it's related to the lack of wheat, and how much you think it's related to pure demand just growing? How do you think about that, and what's the outlook beyond 2022?

So look, meal demand, we don't want to forget, continues to grow every year, right? It's growing the population. It continues to grow with per capita income increases, which drives the demand for animal protein, and ultimately demand for protein meals in fats and oils. So that's in place. We've definitely seen the growth of poultry, with the wheat market definitely tighter globally with the conflict in the Black Sea and some of the weather situations. And of course, when there's less wheat feeding, that's always positive for meal as well. And of course, soybean meal is the one that always finds its way into the ration. So we're pretty constructive on soy meal demand, on protein meal demand. And then long term, pretty interesting, right? You've even got China possibly considering importing soy meal long term, and that's something that never happens. Of course, we'll be supportive of that, and we'd be a participant in that.

When will we have more information on that?

In the future.

Fair enough, fair enough. Do you think with the additional capacity coming online, that will have a meaningful impact on soybean meal? Or do you think that the demand will grow into that and there'll be a way to outsource that to other countries? How do you think about that?

Yes. I think -- we believe the market works, right? Everyone knows it's coming. Everyone is doing a lot of work around it. It doesn't happen overnight. It's not the flip of a switch, comes on a plant at a time. That natural growth that we talk about is happening. We even saw the switches in China as they switched from really kind of a backyard industry to a commercial feeding industry. Inclusion rates improve. The other parts of the world will continue to improve their practices, and you'll see higher inclusion rates and then just the growth overall. So we believe the market will continue to do its work, and some of that will be when additional meal comes on, and it sends a signal to -- for profitability for the animal producers to expand.

The merchandising side of the business is obviously hard to forecast. I know you guys take a very conservative approach of how to forecast going forward. So my first question is, how do you forecast it going forward? And then second, how have and how will trade flows change? And where is Bunge positioned in these trade flows?

Yes. Look, we've got a phenomenal origination and distribution system globally that, of course, feeds our own assets and our other customers and their processing assets in the feed, food and fuel industry. So it is the hardest to forecast, but it does benefit from times of uncertainty, tighter balance sheets and volatility, and that's why we're here, right? We're here to help manage that risk and help our customers at both ends of the supply chain, manage their risk and be successful so that they can continue to grow and expand. And that's in our best interest. So we're absolutely aligned around that and to help manage issues around food security, and we're happy to do that. It's an environment that we believe will continue for a couple of years. If you look at this year, right, enormous amount of uncertainty. We had the war in Ukraine, we had the China lockdowns, geopolitics, the drought in South America. Of course, the U.S. river logistics, U.S. rail logistics, and that's driven buyers and sellers primarily to be spot. But when they wanted coverage, they wanted liquidity, they wanted coverage, and so we had to help them manage their risk. Those flows will continue to shift, and from a globalization, I think we maybe have talked about it before, the unfortunate thing about the war and about some of the geopolitics is that globalization continues to make things cheaper and more readily accessible, and it moved inventories really back towards origination because every origin in every destination was available. That's done for a period of time, right? And that's where you hear friend sourcing and people really working with the partners and the people that they're comfortable with. But what that means is there's fewer origin destinations available to handle surges in demand or problems with supply due to weather or whatever. And that does create some more volatility and create some more complexity. We're glad to be in position here to help our customers manage it, but we don't see that going away anytime soon.

And do you want to give a little update on the situation in Ukraine and Russia? What's your time line? Has it changed? Things got better, how is this affecting your business?

Well, it's definitely tightened up balance sheets globally. It's made it much more challenging for our business to help our customers, but it has been probably a net positive. We've had to manage more risk to help our customers be successful and to manage against food security, but our team has done a fantastic job. It's been good to see the export corridor, the humanitarian corridor opened up in Ukraine. That's helped get a lot of those stocks out into the world that were needed. It's helped bring down food inflation. In the meantime, of course, more transportation had been developed over land over to the West. That remains in place. But it's still not back to the capacity that we were pre-war, and it definitely continues to be tenuous. And then the other real challenge is it's at much higher cost, and that's hurting the farmers' economics. So that continues to hurt their ability to invest in seed technology, to invest in nutrients and even the number of acres that they'll plant. So it puts a risk to the overall yield due to acres and yield per acre. So Ukraine is not the same supplier that they were before, and that will add to some of the complexity going forward here.

And any thought on the trade agreement with Brazil and China, does that -- is that meaningful to you one way or the other way, just the gateway? Or does it really -- does it make a difference?

No, no, definitely positive. We've got a great franchise in South America. It makes complete sense for China to add Brazil as another origin for corn supply. The crop there continues to grow and should continue for the long term, continue to grow. It really fits us well. We also are approved to export out of Argentina, so a lot of flexibility there. And it's good for farmers, it's good for the consumers, so we like it.

Bunge obviously has a stellar balance sheet, generates cash flow. How do you intend to leverage and deploy your capital? What is the progress that you have on some of the capital projects you have? Can we get an update that, on the tangible benefits that were -- that you're starting to see and that you expect to see?

Yes. Well, we laid out, of course, in the baseline our investment that we're going to put over $3 billion to work. We're very excited. I mentioned some of the organic programs that we continue to do. You look at the really having every lever to pull, right? The debottleneckings first, you've got the brownfields, and then of course, the ones that take longer to deliver, of course, the greenfields. We continue to look at M&A, whether it's bolt-on things that we can plug right in and get the network effect, or larger M&A. And as we see higher interest rates, higher volatility, we think there may be other opportunities that become available, and we kind of know what's on our wish list. And then of course, there's always -- our dividend is in place, and we continue -- we've called out how much stock we'll buy back here over the next 5 years. That's part of the model. As well as stock buybacks are always being evaluated. So it's really going to be a mix of all of those things to continue to create value and return value to our stakeholders.

Any anecdotes or anything to tell us on the capital projects, any progress that we can kind of have some sort of insight into of what you've spent, and some examples of how that's created incremental returns or something like that?

Well, I'd just say we have the best lineup of projects that we've ever had at Bunge. It isn't about having the money to invest or having good projects to do. It's really about the human capital and the capabilities to get the equipment and to get the labor and some of the third parties to execute it. So we're a little bit behind, I think, as we called, we're going to be a little bit behind where we had originally said on what capital we'd spend here in 2022. But we do expect to be able to catch up on those projects over time, and the team is doing a great job. But we'll invest across the entire platform. So whether it's on the crushing side, whether it's in the specialty fats and oils, as we look at the build-out in plant proteins and then, of course, in the renewable feedstocks and really, our carbon solutions area, which is just developing in on the front end, so it will be broad-based.

One would argue your stock is undervalued. Somebody would argue that. But if one was to argue that, what would then -- how the next question would be, what would be the impetus for you guys to take a much more aggressive share repurchase program? I know that it's opportunistic. What would require you guys to be opportunistic?

Well, look, we're always going to take that balanced approach to allocating our capital. So it's definitely one of the levers that we can play. And looking at the value, we'd agree. We're highly undervalued. I'd say Bunge's on sale. So look, it will continue to be one of the things that we can do, but we'll take a very balanced approach.

No update there. Is that fair? Any update on the sugar asset sale? Now that the election is over, it seems like that should ease up any sort of political bottlenecks. How do you think about the progress there?

Yes, I think you said it right. The election has kind of frozen a lot of things down there while people waited to see kind of who is going to be in power and then as they roll out the next round of policies, but continue to be really pleased. Our team is doing a fantastic job. BP is a great partner. Team continues to execute, business will be in a good position to be able to dividend to the partners. And long term, our plan hasn't changed. When it makes sense for our stakeholders and we can get the right price, we'll exit our portion of the business, and we'll see what the future brings. But we'll be just as diligent in selling as we are when we invest.

As you look to the next horizon of Bunge, what opportunities excite you the most? Like, what are you thinking about that may not be either appreciated by the market? Or what do you see as just exciting you for the future? How do you think about that?

Well, I just -- our momentum and the position we've got the company. And overall, Ken, I couldn't be more proud of what we've delivered here in the last almost 4 years, while really doing a major turnaround of the company, and probably one of the most difficult external environment someone can see. We've got these great employees that are so passionate about growing this great company, about serving our customers. We've got more dry powder on the balance sheet than we've ever had as we move to the growth phase. We stay focused on the things that we can control. We stay very disciplined around the risk management. So we're just excited about the future and the position we're in, and really looking forward to the journey.

And Ken, if I could just build on that from Greg. I've been with the company almost 20 years, and I've never seen a point where we have so many customers and partners across the chain coming to us for help to get them solutions to move their business forward for where the world is going. I've never seen anything like that. And that, I think, coupled with the money and all the things, puts us in a very privileged position.

That's great. And then just finally -- just leaving it in this. So in terms of what's happened over the last couple of weeks or whatever, there's no reason to expect any changes to 2022. And then the way you've laid out for 2023 and 2024 is that you're still going to be above baseline. There's no change to that, that this is -- completely unaffects Bunge. You guys are positioned to be able to withstand anything that changes in the -- in the spot markets as quickly as they have. Is that a good way to think about it, or am I missing something in that?

No, I think you're exactly right, Ken. Look, the environment continues to be, no doubt, very complex and very hard to predict. But the environment is very good, and it's very good in crushing, it's very good for our distribution businesses. Our customers continue to need us and value what we can do at both ends of the value chain, and then you've got a lot of change happening in the industry with renewable feedstocks and what's happening with the growth in biofuels and renewable diesel, specifically. And these are all opportunities. And I think -- Remember, one of the things that we -- when we showed looking back is that we put the baseline in place to be a mid-cycle and to be conservative, and then we show the history on how we've overearned that baseline based on environment and based on our ability as we've shown to execute in that environment. And what you're seeing now is an environment over the next at least 24 months where we continue to overearn and to earn well above baseline. So we're excited about that. We'll continue to make the investments and continue to update the baseline, and continue to show we can execute a quarter after quarter.

Well, with that, we'll end there. And I really appreciate your time, guys. This is awesome. Thank you.

Thank you. Thanks for having us.

Thanks, Ken. It was a pleasure.

My pleasure.