Tereos apresentacao 3_t13_eng

Tereos Internacional Third Quarter 2012/13 Results

São Paulo – February 15th, 2013

1. Market Update

2. Quarter Highlights

3. Operating Segment Review

4. Cash Flow and Debt Position

5. Top Priorities

6. Outlook

1

2

3

4

5

6

Brazilian Sugarcane Production (MT)

0

100

200

300

400

500

600

700

2011/12: first drop in sugarcane production in 10 years (-10%)

2012/13: production recovery (+5%)

Source: UNICA and Company’s Estimates

-10%

Drop followed by stabilization of raw sugar prices around 18-20 USD cts/lb

The prospect of another global sugar surplus in 2012/13 (between 6-7Mt) is keeping a lid on prices at the moment

World Raw Sugar Prices (USD cts/lb)

Source: BLOOMBERG

+5%

Sugar: Stabilization of World Prices Between 18-20 USD cts/lb 1

3

Weather impact in

Brazil

10

15

20

25

30

35

40

Y-o-Y: +31%

Y-o-Y: +38%

100

120

140

160

180

200

220

240

260

280

300

Wheat Corn

Source: MATIF

European Cereal Prices (€/t)

Starch: Cereal Prices Down From Peak, But Still at High Historical

Levels

4

1

High price volatility to remain a main characteristic of cereal market

Although slightly down from peak in December 2012, prices are sustained by challenging weather in main producing countries (UK, France, Black Sea region and Argentina)

Stock-to-use ratios remain at relatively low levels (corn 13% and wheat 27%)

Demand for EU starch and derivatives in the food sector remains resilient

Source : Cepea Esalq Source : Bloomberg

Brazilian Ethanol Market

Brazil surpassed the US as the world’s largest ethanol

exporter, as high cereal prices impacted North American

production

Increases in gasoline prices at the refinery level by

6.6% and the ethanol blend mandate from 20% to 25%

should bring support for ethanol consumption

European and US Ethanol Market

European ethanol consumption in the quarter declined,

as demand in the winter is tradionally lower

In US, ethanol prices followed corn pricing, which had

dropped 16% since early August

Longer term prospect for European ethanol market

constrained by willingness of EU to cap 1st generation

ethanol at 5% of blend (7% for France)

Ethanol Prices – SP State (R$/liter)

Ethanol: Prices Dropped in Europe and US, while stable in Brazil

Ethanol Prices - FOB Rotterdam & CBOT

5

1

0,50

1,00

1,50

2,00

2,50

3,00

Hydrous Anhydrous

1

1,5

2

2,5

3

3,5

350

400

450

500

550

600

650

700

750

800

€/m3

FOB Rotterdam T2 Ethanol CBOT

USD/Gal.

1,820 1,965

(17)

+45 +138

(21)

Q3 2011/12

Brazil Indian Ocean

Starch Europe

Ethanol Europe

Q3 2012/13

1,820 1,965

+124 +33

(18)

+6

Q3 2011/12

Currency Volume Price & Mix Others Q3 2012/13

Q3 2012/13 – Revenues Record Net Revenues Driven by Higher Volumes in the Starch & Sweeteners and Sugarcane

Segments

6

Net Revenues (R$ MM)

Group revenues supported by good industrial and commercial performance in sugarcane and starch & sweeteners segments but:

Mixed pricing situation Y-o-Y: higher European ethanol & alcohol and isoglucose prices but lower Brazilian sugar and ethanol prices

Ethanol volumes in Europe decreased significantly due to the impact of the difficult start of gluten production on the overall operations of Tereos BENP

Positive perimeter and currency effect

2

271

+34 +19

(4) (38)

+2

284

Q3 2011/12

Brazil Indian Ocean

Starch Europe

Ethanol Europe

Holding Q3 2012/13

Q3 2012/13 - Adjusted EBITDA Positive Impact from Sugarcane Divisions Offsetting Higher Grain Costs and Significant Drop

on the Alcohol & Ethanol Segment’s Contribution

7

Adjusted EBITDA increased year-on-year thanks to higher volumes in the sugarcane businesses, positive Y-o-Y price effect in certain products (European ethanol & alcohol, isoglucose) and positive mix effect in Reunion Island…

… more than offsetting lower prices (Y-o-Y) in the Brazilian sugar & ethanol business, increase in cereal purchase price and significant drop on the alcohol & ethanol segment’s contribution due to low utilization rates at Tereos BENP

Margin 14.5%

Adjusted EBITDA (R$ MM)

Margin 14.9%

2

90 86 50

182 118 43

57

30

Q3

11/1

2

Q4

11/1

2

Q1

12/1

3

Q2

12/1

3

Q3

12/1

3

91

151 115 99

143 40

40

Q3

11/1

2

Q4

11/1

2

Q1

12/1

3

Q2

12/1

3

Q3

12/1

3

375

249 251

401 380

Q3

11/1

2

Q4

11/1

2

Q1

12/1

3

Q2

12/1

3

Q3

12/1

3

2.6 4.7

8.1

5.4

Q3

11/1

2

Q4

11/1

2

Q1

12/1

3

Q2

12/1

3

Q3

12/1

3

Ethanol Sales (‘000 m³) Energy Sales (‘000 MWh) Sugarcane Crushing (MM t) Sugar Sales (‘000 t)

8

Crushing

Recovery in sugarcane volume: 18.2 million tonnes processed (+12%)

5.4 million tonnes in Q3 12/13 (+107.7% Y-o-Y)

Yields improved from 70 t/ha to 84 t/ha this crop but lower TRS (135 kg/ton vs. 138 kg/ton last year)

55 thousand hectares planted in 2012/13 (25% expansion and 75% renewal)

Flexibility of industrial set-up allows shift to more profitable sugar production:

Sugar: 1.5 million tonnes 64% of mix vs. 62% last year

Ethanol: 529,000 m³ 36% of mix

Progress in cogeneration

Own quarterly volumes up 31% Y-o-Y, with portion of volumes sold at higher spot prices

On track to deliver a 50% growth in own cogeneration sales in 2013/14 crop

+1.3% YoY +57.5% YoY +31.1% YoY

Sugarcane Brazil – Production & Sales Higher Crushing on Better Yields and Extended Crop Season (Ended Mid-December)

+107.7% YoY

Own Sales Trading Own Sales Trading

3

593 577

(50) +6

(21)

+64

(15)

Q3 2011/12

Price & Mix

Volume Price & Mix

Volume Others * Q3 2012/13

Sugarcane Brazil – Q3 Financials Higher Volumes Compensating Lower Sugar and Ethanol Prices

* includes Cogeneration, Agricultural Products, Hedging and Ethanol Resales

Key Figures

In R$ Million

Q3

2012/13

Q3

2011/12 Change

Revenues 577 593 -3%

Gross Profit 87 118 -26%

Gross Margin 15.1% 19.9%

EBITDA 153 129 +19%

EBITDA Margin 26.5% 21.7%

Adjusted EBITDA 146 112 +30%

Adjusted EBITDA Margin 25.3% 18.9%

Adjusted EBITDA: R$146 million

• EBITDA improvement in Q3 thanks to lower cash

COGS linked to extended crop period and higher

electricity sales

• Improvement of 640 bps on adjusted EBITDA

margin to 25.3%

• Adjusted EBITDA Margin1 including tilling as

depreciation: 34.6%

Sugar: 64.0% of total net revenues

• Volumes increased +1.5% to 380,000 tonnes

• Prices down -8.0% Y-o-Y at 971.5 R$/tonne

Ethanol: 26.6% of total net revenues

• Own Volume sold increased +10% to 143,000 m3

• Prices down -14.1% Y-o-Y at 1,074.2 R$/m3

Cogeneration: own energy revenues amounted

R$20.3 million (+102.0%)

9

(1) Tereos Internacional allocates tilling expenses as

cost. If tilling expenses were allocated as investment,

Adjusted EBITDA would have reached R$199.4 million.


Sugar Ethanol

3

+0.2% YoY

Sugarcane Africa/Indian Ocean – Production and Q3 Financials Another Quarter of Good Performance

10

Sugarcane Crushing (’000 t) Sugar sales (‘000 t)

Sugarcane crushing

• Larger crop in Mozambique (YTD: 730k tonnes, +4.5% y-o-y)

although yields impacted by weather conditions (drought)

and irrigation issues

• In Reunion Island, slightly lower YTD crushing due to

drought, but higher sugar production on improved TRS

Revenues +19% Y-o-Y

• Higher sugar prices for both divisions and increase in

volumes in Mozambique

Adjusted EBITDA

• 29% increase in Adjusted EBITDA, despite higher labor costs

in Mozambique and sugarcane costs in Reunion Island

-3.4% YoY

Revenue Breakdown by Product

Key Figures

In R$ Million

Q3

2012/13

Q3

2011/12 Change

Revenues 281 236 +19%

Gross Profit 100 55 +83%


EBITDA 84 69 +23%


Adjusted EBITDA 85 66 +29%


1,173

43 116

1,267 1,176

Q3

11/1

2

Q4

11/1

2

Q1

12/1

3

Q2

12/1

3

Q3

12/1

3

89

77 67 76 86

Q3

11/1

2

Q4

11/1

2

Q1

12/1

3

Q2

12/1

3

Q3

12/1

3

Sugar Reunion

35%

Sugar Mozambique

21%

Trading and others 44%

3

204 210 217 237 215

66 62 60 66

52

Q3

11/1

2

Q4

11/1

2

Q1

12/1

3

Q2

12/1

3

Q3

12/1

3

267 270 272 277 303

109 134

110 109 72

62 61

70 51

58

Q3

11/1

2

Q4

11/1

2

Q1

12/1

3

Q2

12/1

3

Q3

12/1

3

130

171

194 180

159

Cereal Segment - Production and Sales Higher Volumes in Starch But Tereos BENP Gluten Start-up Impacting Alcohol & Ethanol

Production

Grinding in Q3: -3.6% Y-o-Y

• Starch & Sweeteners: +5.1% Resilient conditions in starch & sweeteners in Europe Positive perimeter effect with Haussimont acquisition

• Alcohol & Ethanol: -24.0% Collateral production disruptions due to technical difficulties for the start-up of the gluten line at Tereos BENP (working below installed capacity)

11

Cereal Grinding (‘000 t)

Starch & Sweeteners Sales (‘000 t)

-3.6% YoY +5.1% YoY

Co-products Sales (‘000 t)

-1.1% YoY

Alcohol & Ethanol Sales (‘000 m3)

-24.0% YoY

Starch & Sweeteners Ethanol & Alcohol Own Sales Trading Starch & Sweeteners Ethanol & Alcohol

678 710 723 744 698

220 214 209 224 168

Q3

11

/12

Q4

11/1

2

Q1

12/1

3

Q2

12/1

3

Q3

12/1

3

866 898 924 932 968 924 932 968

392 433

450 444 412

Q3

11/1

2

Q4

11/1

2

Q1

12/1

3

Q2

12/1

3

Q3

12/1

3

3

Starch & Sweeteners – Q3 Financials Revenues Improvement on Good Sales Volumes, Helped as Well By Higher Perimeter

Key Figures

In R$ Million

Q3

2012/13

Q3

2011/12 Change

Revenues 843 705 +20%

Gross Profit 141 122 +16%


EBITDA 50 57 -11%


Adjusted EBITDA 52 56 -7%


12


+19.6%

Revenues: R$843 million, up 19.6%

• Organic sales volumes growth (+1.8%) and positive perimeter effect (Haussimont +3.2%)

• Other revenues impacted by higher energy sales and services rendered

Adjusted EBITDA: R$52 million, down R$4 million

• Positive impact of increased volumes and isoglucose prices did not offset higher raw material and energy costs

705 843

+71 +37

(3)

+33

Q3 2011/12


3

286 265

+29

(74)

+27

(3)

Q3 2011/12


Alcohol & Ethanol Europe – Q3 Financials Tereos BENP Collateral Disruption Led to a Strong Drop in Volumes and Profitability

Revenues: R$265 million, down 8%

• Decrease in volumes (-23.8%) mainly due collateral production disruptions on production

• Higher ethanol prices (+9.0% Y-o-Y) and better average prices for co-products due to gluten introduction

Adjusted EBITDA: R$3 million, down 94%

• Significant increase of raw material prices purchased at market prices

• Higher unitary energy costs y-o-y

13


Q3 Revenue Breakdown by Product

Key Figures

In R$ Million

Q3

2012/13

Q3

2011/12 Change

Revenues 265 286 -8%

Gross Profit 13 64 -79%


EBITDA 3 40 -94%


Adjusted EBITDA 3 40 -94%


Alcohol & Ethanol own sales 51%

Ethanol traded 37%

Co-products and other

12%

3

14

Q3 Cash Flow Reconciliation Ongoing Strategic Investments in Key Segments and Seasonal Working Capital

(1) Net debt as of September 30th 2012 restated to include capital increase of R$212 million from PBio into Guarani

Cash Flow

In R$ Million Q3 2012/13(1)

Adjusted EBITDA 284

Working capital variance (133)

Other operating (including income tax paid) (35)

Operating Cash Flow (116)

Financial interests (63)

Dividends paid and received -

Capex (247)

Increase in capital -

Others 29

Free Cash Flow (164)

Forex impact (43)

Acquisition & Perimeter impact -

Net Debt Variation (207)

CAPEX

Brazil: R$102 million

Mainly allocated for (i) planting program; (ii) cogen equipment

and (iii) maintenance costs with the beginning of the intercrop

period

Cereals: R$109 million

Mainly allocated for (i) starch project in Brazil; (ii) capacity

expansion in the starch & sweeteners segment and (iii) Tereos

BENP product diversification (gluten / dextrose)

Working capital

Seasonal cash requirements mostly related to the crop’s

peak in the sugarcane division in Q3 (increasing stocks)

4

Debt Increase Mostly Due to Seasonal Working Capital, Ongoing Investments and Currency Effect

Net Debt/Adjusted EBITDA: 4.0x, stable sequentially considering 3.8x in Sep., 2012(1)

15

Debt

In R$ Million December 31, 2012 March 31, 2012 Change

Current 2,257 1,291 967

Non-current 2,196 2,384 -188

Amortized cost (20) (25) 5

Total Gross Debt 4,453 3,650 783

In € 1,812 1,402 412

In USD 1,793 1,652 140

In R$ 783 557 226

Other currencies 65 64 -

Cash and Cash Equivalent (678) (624) -54

Total Net Debt 3,755 3,026 729

Related Parties Net Debt 35 17 18

Total Net Debt + Related Parties 3,790 3,043 747

4

Currency Variation

December 31, 2012 March 31, 2012 Change

USD/R$ 2.0462 1.8218 +12.3%

€ / R$ 2.6949 2.4295 +10.9%

(1) Net debt as of September 30th 2012 restated to include capital increase of R$212 million from PBio into Guarani

BRAZIL

Continue efforts on agricultural mechanization, factories automation and improvement of

processes

Expand electricity sales (1200 Gwh in 2015)

Strengthen positioning with Petrobras

AFRICA/INDIAN OCEAN

Exploit the agricultural potential of Mozambique

Confirm the key role of sugarcane in the Reunion Island and valorize the Group’s competencies

In Brazil: optimize cost competitiveness to better cope with macroeconomic dynamics Take part in the development of a growing market

Top Priorities: Sugarcane

16

5

Adapt to higher price levels and volatility for cereals Expand presence into growing markets (Brazil/China)

Adapt product mix and industrial base to higher price levels and volatility for cereals

Adjust production of gluten and share of ethanol at Lillebone (Reconversion of the

plant to food industry)

Develop sales of starch & sweeteners in growing markets

Top Priorities: Cereals

17

5

Sugarcane

Brazil: improving outlook for sugarcane and cogeneration

• Recovery of 10% in sugarcane production in 2013/14 crop (crushing above 20 million tonnes)

• Current cogeneration investments to double energy sales level in 2013/14

• Anhydrous blending returns to 25% as of May 1st 2013 should absorb a significant proportion of

additional sugarcane production of 2013/14 crop

• Higher gasoline prices at refinery (+6.6% as of January 31st) to also support ethanol

consumption

Indian Ocean: positive commercial dynamics to continue

Cereals

Europe: diversification to cope with higher cereal prices

• Further prices increases passed onto customers in December negotiation round

• Volumes at Tereos BENP should not reach normalized levels in this fiscal year

• Cereal prices expected to remain high and volatile

Emerging Markets: greenfield projects underway

• Brazil: Syral-Halotek corn-based starch production to start in H1 2013/14

• China: land work progressing at Dongguan site

18

Outlook

6

19

Investor Relations

Phone: +55 (11) 3544-4900

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