1. Tereos Internacional Second Quarter 2012/13 Results So Paulo
November 12th, 2012
2. Quarter Highlights Q2 2012/13 Financial Results Operating
Segment Review Cash Flow and Debt Position Outlook
3. Sugar: Catch-up of Brazilian crop pace after Q1 rain delays
Expected surplus for 2012/13 world crop pressuring international
prices Starch: Despite drought in the US, corn prices fairing
better than wheat due to better crop yields than previously
announced; Record crop in Brazil and a bumper harvest in China
Wheat prices impacted by poor weather conditions in both Northern
and Southern hemispheres Ethanol: Gasoline prices at the pump
continue to restrain domestic ethanol prices in Brazil Severe
drought in the US impacting ethanol production also supporting
prices in the US & Europe, opening up opportunity of exports
from Brazil Q2 2012/13 Market Fundamentals 3 Source: Bloomberg 300
400 500 600 700 800 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 NY#11 LIFFE
#5 US$/MT 170 190 210 230 250 270 Jul-11 Oct-11 Jan-12 Apr-12
Jul-12 Corn Matif Wheat Matif /MT 400 500 600 700 800 700 1000 1300
1600 1900 Jul-11 Nov-11 Mar-12 Jul-12 Brazil ESALQ Europe Rotterdam
R$/m /m
4. +40 +18 +132 +95 Q2 2011/12 Brazil Indian Ocean Starch
Europe Ethanol Europe Q2 2012/13 +120 +120 +36 +9 Q2 2011/12
Currency Volume Price & Mix Others Q2 2012/13 Q2 2012/13
Revenues Higher Volumes Across All Major Products Backed by Higher
Prices in the European Activities 4 Net Revenues (R$ MM) Improved
crop prospects in Brazil (+12% to 18.2 - 18.4 million tonnes
expected this year) and Mozambique Good sales volume performance in
the quarter across most businesses Impact of perimeter increase in
cereals (Selby, Haussimont, Halotek) partially offset by disruption
of production due to the gluten start-up at BENP Lillebonne Mixed
price evolution: slight price pressure in Brazilian sugar and
ethanol but strong price increase in European ethanol 1,648 1,933
1,648 1,933
5. +46 +11 (3) (4) (1) Q2 2011/12 Brazil Indian Ocean Starch
Europe Ethanol Europe Holding Q2 2012/13 Q2 2012/13 - Adjusted
EBITDA Strong Quarter in Sugarcane; Raw Material Costs Impacting
Cereals 5 Strong recovery in Brazilian sugarcane operations in Q2
on the back of increased sales and lower input costs due to rising
yields Good profitability maintained in Indian Ocean Benefit from
increased sales in European operations not fully compensating for
higher cereal input costs and start-up related costs Margin 16.2%
Adjusted EBITDA (R$ MM) Margin 16.0% 264 313
6. 6 Other Key Developments Capital injection of Petrobras
Biocombustvel at Guarani in October 2012 R$212.5 million proceeds
contribute to Guaranis capacity expansion plan. PBios stake in
Guarani increases from 31.4% to 35.8% Nomination of a New Executive
Committee
7. 99 91 151 115 99 40 40 Q2 11/12 Q3 11/12 Q4 11/12 Q1 12/13
Q2 12/13 374 375 249 251 401 Q2 11/12 Q3 11/12 Q4 11/12 Q1 12/13 Q2
12/13 7.8 2.6 4.7 8.1 Q2 11/12 Q3 11/12 Q4 11/12 Q1 12/13 Q2 12/13
Ethanol Sales (000 m)Sugarcane Crushing (MM t) Sugar Sales (000 t)
7 Crushing Better climate conditions favored a catch-up in
sugarcane crushing 8.1 million tonnes in Q2 12/13 (+3.5% Y-o-Y)
Yields improving from 70 t/ha to c. 80 t/ha this crop YTD
Production Sugar: 1,036,000 tonnes 63% of mix (stable Y-o-Y)
Ethanol: 365,000 m 37% of mix Cogeneration Capacity increase on
track to deliver a 50% growth in own production this crop +7.2% YoY
0.0% YoY Sugarcane Brazil Production & Sales Catch-up in
Crushing Activity due to Better Weather +3.5% YoY Own Sales Trading
104 90 86 50 182 2 43 57 Q211/12 Q311/12 Q411/12 Q112/13 Q212/13
Energy Sales (000 MWh) +75.0% YoY Own Sales Trading
8. 502 542 (20) +28 (9) 0 +40 Q2 2011/12 Price & Mix Volume
Price & Mix Volume Others * Q2 2012/13 Sugarcane Brazil Q2
Financials Record Adjusted EBITDA Mostly due to Lower Agricultural
Costs * includes Cogeneration, Agricultural Products and Hedging
Key Figures In R$ Million Q2 2012/13 Q2 2011/12 Change Revenues 542
502 +8% Gross Profit 120 41 +196% Gross Margin 22.2% 8.1% EBITDA
176 115 +52% EBITDA Margin 32.4% 23.0% Adjusted EBITDA 155 109 +42%
Adjusted EBITDA Margin 28.7% 21.8% Adjusted EBITDA: R$155 million
EBITDA recovery in Q2 thanks to higher sales and lower input costs
(higher yields expected) Adjusted EBITDA Margin1 including tilling
as depreciation: 32.1% Sugar: 73.7% of total net revenues Volumes
increased +7.2% to 400,500 tonnes Prices down -2.6% Y-o-Y at 997.9
R$/tonne (ex- heding) Ethanol: 19.5% of total net revenues Volume
sold remain stable at 98,500 m3, as sugar production was favored
Prices down -7.5% Y-o-Y at 1,074.9 R$/m3 Cogeneration: own energy
revenues amounted R$20.9 million (+44.7%) 8 (1) Tereos
Internacional allocates tilling expenses as cost. If tilling
expenses were allocated as investment, Adjusted EBITDA would have
reached R$173.9 million. Net Revenues (R$ MM) Sugar Ethanol
9. -2.8% YoY Sugarcane Indian Ocean Production and Q2
Financials Good Profitability Maintained in Q2 9 Sugarcane Crushing
(000 t) Sugar sales (000 t) Sugarcane crushing Stable Y-o-Y with
slight delay in Reunion Island Larger crop expected in Mozambique
(760,000 tonnes, +8.6%) Revenues +9% Y-o-Y Favorable commercial
environment and increased volumes in Mozambique sustained
profitability Adjusted EBITDA 18% increase in Adjusted EBITDA
mainly reflecting currency effect, despite energy costs and wage
increases 1,304 1,173 43 116 1.267 Q211/12 Q311/12 Q411/12 Q112/13
Q212/13 +2.7% YoY 74 89 77 67 76 Q211/12 Q311/12 Q411/12 Q112/13
Q212/13 Revenue Breakdown by Product Key Figures In R$ Million Q2
2012/13 Q2 2011/12 Change Revenues 215 197 +9% Gross Profit 39 46
-17% Gross Margin 18.1% 23.6% EBITDA 61 58 +5% EBITDA Margin 28.5%
29.7% Adjusted EBITDA 69 59 +18% Adjusted EBITDA Margin 32.4% 30.0%
Sugar Reunion 38% Sugar Mozambique 21% Trading and others 41%
10. Cereal Segment - Production and Sales Increase in Grinding
and Volumes Sold Record grinding in Q2: +3.2% Y-o-Y at 968 k tonnes
of cereals Starch & Sweeteners: +3.3% 744 k tonnes of cereals
ground +60 k tonnes of roots (Haussimont & Syral Halotek)
Alcohol & Ethanol: +2.7% 224 k tonnes of cereals ground, of
which 16 k tonnes higher perimeter effect (Selby) despite stoppage
at BENP Lillebonne for gluten factory ramp-up 10 Cereal Grinding
(000 t) Starch & Sweeteners Sales (000 t) +3.2% YoY +4.7% YoY
424 392 433 450 444Q2 11/12 Q3 11/12 Q4 11/12 Q1 12/13 Q2 12/13
Co-products Sales (000 t) +7.8% YoY 110 109 134 110 109 26 62 61 70
51 Q2 11/12 Q3 11/12 Q4 11/12 Q1 12/13 Q2 12/13 136 171 194 180 159
Ethanol & Alcohol Sales (000 m3) +16.9% YoY 720 678 710 723 744
218 220 214 209 224 Q2 11/12 Q3 11/12 Q4 11/12 Q1 12/13 Q2 12/13
938 898 924 932 968 221 204 210 217 237 59 66 62 60 66 Q2 11/12 Q3
11/12 Q4 11/12 Q1 12/13 Q2 12/13 281 270 272 277 303 Starch &
Sweeteners Ethanol & Alcohol Own Sales Trading Starch &
Sweeteners Ethanol & Alcohol
11. Starch & Sweeteners Q2 Financials Higher Volume and
Prices Improving Revenues Key Figures In R$ Million Q2 2012/13 Q2
2011/12 Change Revenues 847 715 +19% Gross Profit 144 113 +27%
Gross Margin 17.0% 15.8% EBITDA 60 72 -17% EBITDA Margin 7.1% 10.1%
Adjusted EBITDA 58 61 -5% Adjusted EBITDA Margin 6.8% 8.5% 11 Net
Revenues (R$ MM) +18.5% Revenues: R$847 million, up 18.5% Higher
volumes (+5.5% ) only partly due to perimeter effect (Halotek and
Haussimont) Slight increase in average price Adjusted EBITDA: R$58
million, down R$3 million Positive impact from increased volume
offset by start-up costs (Halotek) and rising raw material costs
715 847 +72 +39 +12 +10 Q2 2011/12 Currency Volume Price & Mix
Others Q2 2012/13
12. Alcohol / Ethanol Europe Q2 Financials Revenues Benefitted
from Higher Prices and Volumes Despite Delay in Gluten Ramp-up
Revenues: R$329 million, up 40% Increase in volumes (+15.6%) mainly
due to Selby start-up and higher trading sales Prices significantly
up (+17.5%) due to impact of US drought on international prices
Adjusted EBITDA: R$33 million, down 10% Higher proportion of wheat
purchased at market prices (30%) Production disruption impact
linked to gluten ramp-up Adjusted EBITDA margin excluding trading
for Tereos would be 13.8% 12 Net Revenues (R$ MM) +40.4% Revenue
Breakdown by Product Key Figures In R$ Million Q2 2012/13 Q2
2011/12 Change Revenues 329 234 +40% Gross Profit 45 70 -36% Gross
Margin 13.7% 30.1% EBITDA 33 37 -11% EBITDA Margin 10.0% 15.8%
Adjusted EBITDA 33 37 -10% Adjusted EBITDA Margin 10.0% 15.7% 234
329 +24 +37 +41 (7) Q2 2011/12 Currency Volume Price & Mix
Others Q2 2012/13 Ethanol own sales 62% Ethanol traded 27%
Co-products and other 11%
13. 13 Q2 Cash Flow Reconciliation Substantial CAPEX effort and
Seasonal Working Capital Increase (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 Proforma Q2 2012/13(1)
Adjusted EBITDA 313 Working capital variance (408) Other operating
(including income tax paid) (52) Operating Cash Flow (146)
Financial interests (33) Dividends paid and received (3) Capex
(229) Increase in capital 212 Others - Free Cash Flow (199) Forex
impact (37) Acquisition & Perimeter impact - Net debt variation
(236) CAPEX Brazil: R$98 million Mainly allocated for renewal
planting program and cogen equipment purchases Indian Ocean: R$26
million Mainly allocated for maintenance and new waste water
treatment at Reunion Island Cereals: R$131 million Mainly allocated
for (i) starch project in Brazil, (ii) capacity expansion in Europe
and (iii) BENP Lillebonne gluten and glucose project Working
capital Seasonal cash requirements mostly related to the crops peak
for the Brazilian sugarcane segment in Q2 (increasing stocks)
14. Debt Increase Mostly Due to Currency Effect, Seasonal
Working Capital and Substantial Capex Effort Net Debt / Adjusted
EBITDA: 3.8x vs 3.2x in March, 2012 14 Debt In R$ Million Pro Forma
Sept. 30, 20121 March 31, 2012 Change Current 1,992 1,291 701
Non-current 2,394 2,384 10 Amortized cost (22) (25) 3 Total Gross
Debt 4,364 3,650 714 In 1,677 1,402 275 In USD 1,856 1,652 204 In
R$ 785 557 228 Other currencies 68 64 4 Cash and Cash Equivalent
(817) (624) (193) Total Net Debt 3,547 3,026 521 Related Parties
Net Debt 23 17 6 Total Net Debt + Related Parties 3,570 3,043 527
(1) Net debt as of September 30th 2012 restated to include capital
increase of R$212 million from PBio into Guarani.
15. Sugarcane Brazil: catch-up in crushing and increasing
cogeneration Crushing this crop to be between 18.2 - 18.4 million
tonnes (12% up) Current investments at Mandu/So Jos plants to
further increase cogeneration next crop Anhydrous blending expected
to be back to 25% next year Indian Ocean: sugar prices remain
supportive Mozambique: steadily increasing production Reunion
Island: commercial conditions to remain favorable Cereals Europe:
diversification to cope with higher cereal prices Gluten production
and glucose project in BENP Lillebonne Next renegotiation round in
December to pass-through cereal prices increase Emerging Markets:
greenfields projects underway Brazil: Syral-Halotek corn plant
production to start at the end of Q1 2013/14 China: site for the
Dongguan plant selected, land work started 15 Outlook