2009 ANNUAL REPORT bridging local & global KujawsKi oil, KobylniKi, Poland financial highlights NET INCOME volumes total segment ebit(1) ATTRIBUTABLE TO BUNGE MILLIONS OF METRIC TONS US$ IN MILLIONS US$ IN MILLIONS 150 1,500 1,100 1,064 1,363 141 1,208 1,000 140 138 1,250 137 900 1,000 800 778 130 750 700 120 618 120 117 543 600 500 443 530 521 500 110 250 400 361 100 0 300 05 06 07 08 09 05 06 07 08 09 05 06 07 08 09 return on common earnings Per share– cash dividends Per shareholders’ equity(2) diluted common share PERCENTAGE US$ US$ 20 10 10 18 9 16 16 8 7.73 9 14 14 13 7 .820 12 11 6 5.95 8 10 5 4.43 4.28 .740 8 4 7 .670 6 3 .630 4 2.22 4 2 6 .560 2 1 0 0 5 05 06 07 08 09 05 06 07 08 09 05 06 07 08 09 (1) Total segment earnings before interest and tax (“EBIT”) (2) The calculation of return on common shareholders’ equity is is a non-GAAP financial measure. A reconciliation of total based upon net income available to common shareholders and segment EBIT to net income attributable to Bunge, the most shareholders’ equity attributable to common shareholders. directly comparable U.S. GAAP financial measure, is presented below. For more information see the 2009 Form 10-K. YEAR ENDED DECEMBER 31, (US$ in millions) 2005 2006 2007 2008 2009 Total segment EBIT $543 $618 $1,208 $1,363 $443 Interest-net (126) (161) (187) (147) (161) Income tax benefit (expense) 82 36 (310) (245) 110 Noncontrolling interest share of interest and tax 31 28 67 93 (31) Net income attributable to Bunge $530 $521 $778 $1,064 $361 Front cover: exPort terminal, port oF south louisiana, u.s.a. 2009 bunge annual report | 1 business Profile Bunge plays an essential role in the world’s food production chain. We help farmers produce bigger harvests, we move agricultural commodities from where they are grown to where they are consumed and we process them into ingredients, food products and renewable fuels. founded 1818 400+ 30,000 amsterdam, locations emPloyees the netherlands global 30+ headquarters countries of white Plains, oPeration new yorK, u.s.a. 2009 volumes 141 million metric tons Bunge: • Buys, sells, stores and transports oilseeds and grains to customers worldwide. • Crushes oilseeds to make protein meal for animal feed – and to make vegetable oil, margarine and mayonnaise for food processors, the food service industry and consumers. • Mills wheat and corn to make ingredients used by food processors, bakers and brewers. • Crushes sugarcane to make sugar and ethanol. • Sells fertilizer to farmers in North and South America. 2 | 2009 bunge annual report sunseed Processing Plant, Kolodeznoye, russia bunge asia headquarters, singaPore ALBERTO WEISSER chairman & chief executive officer DEAR SHAREHOLDERS, 2009 and early 2010 was a time of successes, were disappointing. We faced significant Also, our fertilizer portfolio is changing setbacks, strategic moves and significant challenges in Fertilizer. Consequently, dramatically. While collectively our retail volatility. We learned some hard lessons, our net income fell considerably from fertilizer business in Brazil, our fertilizer but also made strides in improving our 2008, despite strong performances in operations in Argentina and the United business and positioning it for growth. Agribusiness and Food & Ingredients. States and our joint venture in Morocco I believe that Bunge has emerged from We can and will do better. will continue to make a meaningful this period a stronger company, well contribution to our bottom-line results, The losses in our fertilizer business stemmed equipped to deliver value to shareholders we will no longer own and operate nutrients from a dramatic decline in demand for end and perform a key role in the world. assets, including mines, in Brazil. This shift products that began in the second half comes as a result of our decision, one of the There is probably no better way to of 2008. In response, both international most significant we have made in recent describe this role than to say that we are and local Brazilian prices for fertilizers years, to sell these assets to Vale S.A. a bridge – an efficient, dependable and collapsed and continued to trend safe way to get agricultural products from downward for much of 2009 (Figure 1). Three key factors drove this decision: local farms to the global market, from the For Bunge, this caused an ongoing • First, we are receiving a very attractive day they are harvested to the day they mismatch between market prices and price that enables us to realize the full are needed, from regions of abundance to inventory costs, resulting in negative margins. value of our nutrients assets. regions of scarcity. It’s a valuable service Moving forward, we are approaching the that will become more critical as the • Second, changes in the fertilizer Brazilian retail fertilizer business differently. world’s population grows. We are proud industry made us think twice about We are not accepting as much risk and are to provide it, and confident that we have committing the large amounts of linking our fertilizer business even more the strengths and competencies to do it capital that would be required to grow closely to our agribusiness operations to well and profitably. this part of the business. Significant optimize our volumes, product offerings and low-cost phosphate production logistics. We are reducing risks associated capacity, much of it government- fertilizer changes with price volatility by consolidating backed, is expected to come online in responsibility for raw-material sourcing and hile we’re positive about the the next few years, and a stronger local end-product sales, and we are working to future, it’s important to under- currency in Brazil continues to act as W reduce lead times on purchases and adjust stand the past, and no discussion of the a cost headwind. The industry is also our cost structure. We expect these changes recent past can start without a candid in a period of consolidation. Large to have a positive impact beginning this year. acknowledgement: Bunge’s 2009 results mining companies are moving quickly 2009 bunge annual report | 5 self-sufficiency is not an option for most FIGURE 1: DRAMATIC FALL OF INTERNATIONAL PHospHATE PRICES of the world. In fact, some of the fastest $1,400 growing regions have the most limited $1,200 agricultural capacity and the least rainfall. Forty-four percent of the world’s $1,000 population – including parts of India and $800 China – live in areas of water stress, and $600 many other people live in regions – such as the Middle East and North Africa – $400 with poor or degraded soils, or limited $200 ERG arable land. All of these societies will rely B $0 on trade with large producing regions, 8/14/08 10/14/08 12/14/08 2/14/09 4/14/09 6/14/09 8/14/09 10/14/09 12/14/09 including the Americas, Eastern Europe RCE: BLOOM RCE: U Historical DAP Pricing (US$ FOB Tampa) SO and, increasingly, Africa, to meet their food needs (Figure 2). This will necessi- tate extending farm-to-market linkages in the global market and diversifying production will need to increase even around the world in a seamless fashion. their portfolios. We are pleased that more to meet demand for renewable fuels It will require extensive investments in the operations, and the dedicated and other non-food uses. agricultural storage, market facilities and employees who have made it a success, basic processing – up to $50 billion a year Meeting these needs will require better will join Vale and continue to make a in the developing world alone – according seed technology and greater use of inputs, strong contribution to Brazil. to the FAO. including fertilizer. It will also require • Third, and most important to Bunge’s expanded infrastructure to connect Clearly, there is a gap between where we future, this transaction will enable us farmers to the marketplace and provide are as a global society and where we will to redeploy capital into other areas of them with economic incentives to reinvest need to be. Companies like Bunge, which our business. Quite simply, we can do in production. This is true in regions like can meet a global challenge with a global more of what we do best in Agribusi- enterprise, can help to bridge this gap. ness and Food & Ingredients, where we We believe that three key characteristics are, or can be, a global leader. Selling The UN Food and will help us succeed: these assets also gives us the financial • An integrated, global network of flexibility to enter new value chains, Agriculture Organization storage, processing and logistics assets including Sugar & Bioenergy and other that provide the ability to participate commodity products, in which we can estimates that the world in key growth regions, capitalize on leverage our logistics, commercial and will need to increase food market opportunities and manage the risk management capabilities to build agricultural industry’s inherent volatility; profitable businesses. production 70 percent • Value chains that by 2050 to feed a more comPELLING – leverage common fixed assets and oPPORTUNITIES affluent global expertise for greater efficiency and profitability, population of 9 billion. e see clear and compelling – create a broader product portfolio Wopportunities in our core businesses and in related value chains – and provide diversified revenue streams; South America and Eastern Europe, because the world faces clear and urgent • A team that is as agile as the market is vola- where infrastructure remains undersized, challenges.