John Neppl: But I would add, Ben, that our call down next year right now is principally outside the U.S. And I think we feel very good about the S&D in the U.S. It’s — we had an exceptional year in 2022 globally. And we’re not calling maybe the same level outside the U.S. is what we saw this year. And then relative back to the — our strategic financial plan, we knew RSO, the whole Refined and Specialty Oils business was going to over perform or perform very well here in the near term. But over time, we modeled in, in our baseline that refining premiums would decline eventually. Now what we’re seeing is projects taking longer to happen and possibly a longer runway on the strong margins that we built in ultimately. So we feel pretty good about where we are now, and we’ll just watch long-term what happens with refining capacity.
Benjamin Theurer: Perfect. Very clear. Thank you very much. And then second question is really just about the general flex, obviously, that we’re going to have within the guidance. And one of that is that if you could elaborate maybe a little more detail on the tax rate, which obviously is a relatively wide range, but also significantly higher than in the last two years. Is that all geographic mix or what’s behind that higher, call it, midpoint 5% to 6% higher tax rate that you’re seeing for this year versus the last two years?
John Neppl: Yes. The biggest single driver is our assumption around geographic mix. We do expect in Brazil, for example, taxable income to be much higher in 2023, and that’s one of our highest-rated jurisdictions in terms of tax rate. We also had, over the last couple of years, as we’ve cleared off some historical audits, we’ve had some onetime valuation releases that impacted our effective tax rate. But it is a wide range at this point because of the mix of geography, it’s sometimes a little difficult early in the year to predict, but we’ll fine-tune that as we move through the year.
Benjamin Theurer: Perfect. Well, thank you very much and congrats on a very strong 2022.
Greg Heckman: Thank you.
John Neppl: Thank you.
Operator: The next question comes from Manav Gupta with UBS. Please go ahead.
Manav Gupta: So I just have 1 quick question. On December 15, you made an announcement that you are looking to invest in a new protein concentrate facility. I think $550 million was the CapEx. Help us understand why this investment? Why is it a good strategic fit? And then what kind of earnings uplift can you expect from this investment? And I’ll turn it off over after that.
Greg Heckman: Yes. I’ll start on the strategy, and I’ll let John talk to the numbers. But no, look, we continue to see growth in the plant protein space. We’re already serving customers with the lipids, which are the specialty fats and oils that give the taste and the mouth feel and the bite to a lot of those products. And we are on the plant protein side, we are a commodity supplier today of many of those products. So this is a natural adjacency. This is a natural valuing up of our commodity streams similar to what we’re doing in and some other areas. So we’re a natural. We have a right to win. We can be in a cost competitive position. And frankly, we’ve got our customers asking for us to be there as a supplier and they want to work with us.
And that’s why we already did last year a multimillion dollar improvement in our innovation and R&D facility, and we’re already working with customers, putting our lipids with plant proteins and developing new and different products. So we’re excited about this. We’ve also seen as that space continues to develop, I don’t think of it as not just all meats, it’s all plant protein opportunities, whether it’s nondairy, whether it’s plant butters and that trend is in place, and it’s up to the ripe. And the other thing I think we’ve seen shake out in the last two years is that soy is going to be the winner. And soy is going to be the winner from a cost basis, from a taste, from a functionality and frankly, that’s a good outcome for Bunge.
John Neppl: Yes. And in terms of returns, any projects like this, we look for a minimum of 12% to 15% return. So you can kind of model that in. But this project won’t be completed until roughly sometime in 2025. So it’s going to take a bit of time from a development standpoint, getting that all wrapped up and then getting the construction actually completed.
Manav Gupta: Thank you so much. And congrats on a great quarter.
John Neppl: Thank you very much.
Operator: The next question comes from Thomas Palmer with JPMorgan. Please go ahead.
Thomas Palmer: Thanks and good morning. I wanted to ask on just the expected cadence of earnings in ’23. Does the outlook you kind of lay out assume stronger earnings, for instance, in the first half of the year and then some erosion in the back half? Are there segments where earnings might be more lumpy than in others?
John Neppl: Yes. I would say the way we’re looking at it right now, Tom, is when we look at the — at least $11, I’d say our bias is a little bit skewed toward the first half of the year and then within the first half a little bit toward the first quarter. So that’s kind of how I think about it, if I was laying it out. And obviously, where we think the biggest opportunity is going to be is in merchandising, and that’s always difficult to predict the timing and the magnitude, but that could very well be realized a little lumpier or could be over the year kind of evenly. It’s just going to depend on opportunities. But at this time, I’d bias a little toward the first half and a little bit toward first quarter inside the first half. But we will be in our first quarter will be lower than last year. We had an extremely strong last year first quarter, I think, north of $4 a share.
Thomas Palmer: Okay. Thank you for finding that. And then I just wanted to maybe ask on the CapEx piece. So the presentation and then your comments, you noted the reassessment of scope and timing of some projects due to a recent spike in costs. A couple of quarters ago, you laid out this longer-term CapEx — I guess it’s combined CapEx and M&A ultimately of $3.3 billion. Is that number still intact? Does that need to have moving pieces where the M&A component maybe is less? I’m just trying to understand if that longer-term investment is also adjusted given that reference spike in costs?
John Neppl: Yes, we have not yet canceled any project that we had on that list. The timing is — we’re assessing timing. We’re also assessing the design of some of those projects, given the inflationary pressures, looking for value engineering ways to make it more efficient. But ultimately, that plan is still pretty much intact. I think we still feel pretty good about the timing on the commissioning down the road. So we haven’t yet adjusted our long-term view on those. So at this point, we’re still holding to what we had, but we’ll see as we go forward.
Greg Heckman: And I think the other thing you want to keep in mind, I don’t think it’s specific to Bunge or even specific to this industry. It’s more expensive to build things, whether it’s the labor or the equipment and the interest cost or and it’s taking longer to build things. But what that has done for our installed asset base, right, is keeping margins higher and it’s keeping the environment stronger for a longer period of time. So I think that allows us to have the discipline, do these projects the right way and still build them. So it’s probably pushed out the amount of time that we’re able to kind of over earn versus the model because of the environment and then the projects will just come in a little bit later.
John Neppl: Yes. Maybe one other thing to add, Tom, would be that we’ve been able to keep largely on track with our maintenance-type projects. And when you’re in a margin environment like we are right now globally, it’s important to keep your assets running smoothly. So we’re pretty pleased, at least, that we’ve been able to stay on track and on time with all of our key maintenance projects.
Thomas Palmer: Okay. Thanks for the details.
Greg Heckman: You bet.
