Bunge Ltd. has named board member Gregory A. Heckman as acting CEO, effective immediately. He replaces Soren Schroder, who previously announced his intention to step down.
The company also provided an update on its full-year 2018 financial results. On a preliminary basis, Bunge now expects full-year 2018 total segment adjusted EBIT to be below the previously disclosed $1.045 billion low end of the outlook range. Net debt at year-end 2018 was approximately $5 billion, reduced from approximately $7 billion at the end of the third quarter 2018.
For the full year 2018, Bunge estimates an adjusted EBIT shortfall of approximately $90 million to $100 million in the agribusiness segment and a shortfall of approximately $60 million to $70 million in the sugar and bioenergy segment, compared to the low end of the previously disclosed ranges.
The agribusiness shortfall was largely due to the reduction in value of the company’s Brazilian soybean ownership as factors related to China trade and demand caused Brazilian prices to converge with U.S. prices. The sugar and bioenergy shortfall was primarily due to lower Brazilian ethanol prices, and a weather-related reduction in yields as a poor crop year came to a close.
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Commenting on Heckman’s appointment, Bunge’s Non-Executive Board Chair Kathleen Hyle said: “Greg has been a valuable addition to our board and strategic review committee and we are pleased to appoint him as our acting CEO. Our committee has benefited from his counsel and expertise. With Greg in this role, we have a greater opportunity to leverage his perspective, deep industry knowledge and leadership experience, as we take action to improve our results and sharpen our operational focus and execution.”
Heckman, 56, joined the Bunge board in 2018. He has more than 30 years of experience in the agriculture, energy and food processing industries, having served as CEO of The Gavilon Group and in senior executive roles at ConAgra Foods.
“I look forward to further collaboration with Kathi, the board and our management team, focusing on ways to improve performance and create shareholder value,” Heckman said. “Bunge is a great company, and our strong foundation and global leadership scale in agribusiness and food & ingredients positions us well for future growth. As a team, we will build on the forward momentum of our strategic review, which is focused on our portfolio, key business drivers and opportunities to enhance shareholder value.”
Bunge’s CEO search committee continues its work and will seek to conclude the search as soon as practicable, while ensuring that the process is thorough and deliberate.
Additionally, as part of Bunge’s ongoing board refreshment process, the company announced that L. Patrick Lupo, Ernest Bachrach and Enrique Boilini, three of its longest-serving board members, will not stand for re-election at the company’s 2019 annual general meeting of shareholders. Each will remain on the board until his current term expires, in May 2019.
“On behalf of the board and the company, I want to thank Soren for his leadership of Bunge during this period, and to thank Pat, Ernest and Enrique for their many years of dedicated service as directors,” Hyle said.