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Bunge Details $250 Million Competitiveness Program and Provides Update on Second Quarter Performance

WHITE PLAINS, N.Y., July 19, 2017 /PRNewswire/ -- Bunge Limited (NYSE: BG) today announced a comprehensive global Competitiveness Program to improve its cost position and deliver increased value to shareholders. The program, which has been discussed over the past several quarters, will rationalize Bunge's cost structure and reengineer the way it operates, reducing overhead costs by approximately $250 million once fully implemented. These savings are in addition to the savings generated through the company's existing industrial productivity program. The company will achieve these cost savings by aggressively adopting a zero-based budgeting process that will target costs in specific budget categories, simplifying its organizational structure, streamlining processes and consolidating back office functions globally to improve efficiency and scalability. In addition, the company will be reducing its 2018 total capex spend from a previously announced $750 million to $650 million.

Soren Schroder, Bunge's Chief Executive Officer, stated, "We have a unique, irreplaceable footprint and a strong, growing customer base that relies on us for competitively priced, high quality products under all market conditions. Demand and margin trends are positive, and the Competitiveness Program is a transformational next step to reengineer our organizational and cost structure, which will advance our growth agenda and create significant value for our shareholders."

The company expects the Competitiveness Program to provide modest benefits to 2017 earnings. Approximately $100 million of the savings are anticipated to be realized in 2018 and $180 million in 2019. Full run rate cost savings of $250 million are expected to be achieved by the end of 2019. The company expects total non-recurring charges associated with the program to be 0.8-1.2x of targeted savings, most of which are expected to be cash charges spread over the next two and half years.

Thomas Boehlert, Bunge's Chief Financial Officer, stated, "We started the process to launch this program in early 2017 and are now beginning implementation. I'm confident that these steps will improve our competitiveness and position us well as market conditions improve."

Today, the company also announced that it expects second quarter 2017 adjusted earnings to be modestly profitable, but below the low end of the range of analyst estimates, primarily driven by...