Milling & Baking News - May 21, 2019 - 22

Financial Results

Cost-cutting effort helps Bunge
return to profit in first quarter
WHITE PLAINS, N.Y. - Bunge Ltd. returned to first-quarter profit boosted by
a corporate cost-cutting program. Net
income of $45 million, or 26c per share
on the common stock, in the quarter
ended March 31 compared with a loss
of $21 million in the previous year's
first quarter. Sales dropped 7% to $9,938
million from $10,641 million.
The Global Competitiveness Program, introduced in July 2017 to
simplify operations and streamline
customer service, is on track to deliver a total savings of $250 million a
year ahead of schedule, according to
Bunge. The company achieved $200
million in cost reductions through
2018 and expects an incremental $50
million in 2019.
"G.C.P. has already gone a long way
to reduce costs, simplify how we work
and help us think differently," said
Gregory A. Heckman, chief executive
officer, in a May 8 earnings call. "We
will use this momentum, along with
the changes to our operating model, to
develop a cost structure for the cyclical nature of our industry."
Continued standardization of processes and a move to shared services,
I.T. rationalization, and reductions in
indirect spending primarily will drive
the incremental savings this year, said
Thomas M. Boehlert, executive vicepresident and chief financial officer.
Bunge's stock on the New York
Stock Exchange closed at $53.44 per

share on May 8, which was up 7%
from the May 7 close of $49.98 per
share.
Within the company's Edible Oil
Products segment, a full quarter of
Loders Croklaan ownership and higher margins in Brazil operations drove

Bunge Ltd. share price
per share

$75

$67

$59

$51

$43

June Aug.
2018

Oct.

Dec.

Feb. April
2019

improved results. Bunge on March 1,
2018, completed its acquisition of a
70% ownership interest in IOI Loders
Croklaan for about $946 million from
IOI Corporation Berhad. First-quarter
EBIT was $48 million for Edible Oil
Products, up from $28 million. Net
sales of $2,239 million were up 4.2%
from $2,149 million
Agribusiness EBIT was $109 million,

Weston profits off; restructuring
seen delivering rising benefits
TORONTO - Operating income in
the Weston Foods segment of George
Weston Ltd. totaled C$10 million
($7.4 million) in the first quarter of
fiscal 2019 ended March 23, down
9% from C$11 million in the same
period a year ago. Adjusted EBITDA,
meanwhile, rose 2.2% to C$46 million ($34.1 million) from C$45
million. Sales decreased 0.2% to
C$516 million ($382.8 million) from
C$517 million.
"Weston Foods has begun to stabilize," said Richard Dufresne, president
and chief financial officer of George
Weston Ltd., during a May 7 conference call with analysts. "Management
delivered on their plan in the quarter, the transformation program is
22 / May 21, 2019

Milling & Baking News

delivering cost savings, and we are
seeing improvements in operational
metrics. More importantly, the team
has improved on how it shows up to
customers, and this has resulted in the
company earning some new business
in its growth categories.
"As we look at 2019 for George
Weston as a whole, the single largest
opportunity for narrowing our value
gap and driving shareholder returns
rests with the continued strong performance of Loblaw and Choice, the
stabilization at Weston Foods and
the compelling long-term strategies
of each."
Luc Mongeau, president of Weston
Foods, said the company has invested in sales strategy efforts and R.&D.

up from $42 million in the previous
year's first quarter, Net sales of $6,919
million were down 7% from $7,462 million. Within Agribusiness, soy crush
margins in oilseeds were higher in the
United States, Brazil and Europe due
to Bunge's decision in 2018 to hedge
a portion of its first-half 2019 crush
capacity. Also within Agribusiness,
lower margins and volumes in grains
were due to the combination of farmer
retention of soybeans and reduced export demand from China.
Milling Products EBIT of $17 million matched results from the previous year's first quarter. Net sales of
$426 million were up 4.2% from $409
million. Lower margins and volumes
in Mexico more than offset improved
results in Brazil. Results in the United
States were similar to the results in the
previous year's first quarter.
Losses before interest and taxes
were $24 million for Sugar & Bioenergy, which was the same figure as seen
in the previous year's first quarter.
Net sales plunged 49% to $285 million
from $563 million. The first quarter
was the intercrop period as production for the season began toward the
end of March. Sugar and ethanol sold
during the first quarter was inventory
from the previous harvest. Sugar cane
milling results were slightly below last
year primarily because of lower sugar
and ethanol prices.
EBIT of $1 million for Fertilizer compared to a loss of $2 million before interest and taxes in the previous year's
first quarter. Net sales of $69 million
were up 19% from $58 million. MBN
capabilities, which has allowed
Weston to cement its relationship
with key retail business partners and
food service operators across Canada
and the United States.
"In the last few quarters this has
resulted in us winning significant
pieces of business in our frozen business, mostly in donuts and in pies,"
Mr. Mongeau said.
Overall, George Weston sustained
a loss of C$488 million, which compared with earnings of C$180 million,
equal to C$1.38 per share on the common stock, a year ago. George Weston
said the loss in the most recent quarter
mainly was attributable to an unfavorable year-over-year impact of adjusted
items totaling C$691 million, including the impact of the fair value adjustment of the Trust Unit liability. Sales
increased to C$11,173 million from
C$10,744 million. MBN
bakingbusiness.com / world-grain.com

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Milling & Baking News - May 21, 2019

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