0
Tereos Internacional
Second Quarter 2012/13 Results
São Paulo – November 12th, 2012
Quarter Highlights
Q2 2012/13 Financial Results
Operating Segment Review
Cash Flow and Debt Position
Outlook
Sugar:
 Catch-up of Brazilian crop pace after Q1 rain delays
 Expected surplus for 2012/13 world crop pressuring
interna...
+40 +18
+132
+95
Q2
2011/12
Brazil Indian
Ocean
Starch
Europe
Ethanol
Europe
Q2
2012/13
+120
+120 +36 +9
Q2
2011/12
Curren...
+46 +11
(3) (4) (1)
Q2
2011/12
Brazil Indian
Ocean
Starch
Europe
Ethanol
Europe
Holding Q2
2012/13
Q2 2012/13 - Adjusted E...
6
Other Key Developments
 Capital injection of Petrobras Biocombustível at Guarani in October 2012
 R$212.5 million proc...
99 91
151
115 99
40
40
Q2
11/12
Q3
11/12
Q4
11/12
Q1
12/13
Q2
12/13
374 375
249 251
401
Q2
11/12
Q3
11/12
Q4
11/12
Q1
12/1...
502 542
(20)
+28
(9) 0
+40
Q2
2011/12
Price &
Mix
Volume Price &
Mix
Volume Others * Q2
2012/13
Sugarcane Brazil – Q2 Fina...
-2.8% YoY
Sugarcane Indian Ocean – Production and Q2 Financials
Good Profitability Maintained in Q2
9
Sugarcane Crushing (...
Cereal Segment - Production and Sales
Increase in Grinding and Volumes Sold
 Record grinding in Q2: +3.2% Y-o-Y at 968 k ...
Starch & Sweeteners – Q2 Financials
Higher Volume and Prices Improving Revenues
Key Figures
In R$ Million
Q2
2012/13
Q2
20...
Alcohol / Ethanol Europe – Q2 Financials
Revenues Benefitted from Higher Prices and Volumes Despite Delay in Gluten Ramp-u...
13
Q2 Cash Flow Reconciliation
Substantial CAPEX effort and Seasonal Working Capital Increase
(1) Net debt as of September...
Debt
Increase Mostly Due to Currency Effect, Seasonal Working Capital and Substantial Capex Effort
 Net Debt / Adjusted E...
 Sugarcane
 Brazil: catch-up in crushing and increasing cogeneration
• Crushing this crop to be between 18.2 - 18.4 mill...
16
Investor Relations
Phone: +55 (11) 3544-4900
ir@tereosinternacional.com
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  1. 1. Tereos Internacional Second Quarter 2012/13 Results São Paulo – November 12th, 2012
  2. 2. Quarter Highlights Q2 2012/13 Financial Results Operating Segment Review Cash Flow and Debt Position Outlook
  3. 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$/MT 170 190 210 230 250 270 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Corn Matif Wheat Matif €/MT 400 500 600 700 800 700 1000 1300 1600 1900 Jul-11 Nov-11 Mar-12 Jul-12 Brazil ESALQ Europe Rotterdam R$/m³ €/m³
  4. 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. 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. 6 Other Key Developments  Capital injection of Petrobras Biocombustível at Guarani in October 2012  R$212.5 million proceeds contribute to Guarani’s capacity expansion plan. PBio’s stake in Guarani increases from 31.4% to 35.8%  Nomination of a New Executive Committee
  7. 7. 99 91 151 115 99 40 40 Q2 11/12 Q3 11/12 Q4 11/12 Q1 12/13 Q2 12/13 374 375 249 251 401 Q2 11/12 Q3 11/12 Q4 11/12 Q1 12/13 Q2 12/13 7.8 2.6 4.7 8.1 Q2 11/12 Q3 11/12 Q4 11/12 Q1 12/13 Q2 12/13 Ethanol Sales (‘000 m³)Sugarcane Crushing (MM t) Sugar Sales (‘000 t) 7  Crushing  Better climate conditions favored a catch-up in sugarcane crushing  8.1 million tonnes in Q2 12/13 (+3.5% Y-o-Y)  Yields improving from 70 t/ha to c. 80 t/ha this crop  YTD Production  Sugar: 1,036,000 tonnes 63% of mix (stable Y-o-Y)  Ethanol: 365,000 m³ 37% of mix  Cogeneration  Capacity increase on track to deliver a 50% growth in own production this crop +7.2% YoY 0.0% YoY Sugarcane Brazil – Production & Sales Catch-up in Crushing Activity due to Better Weather +3.5% YoY Own Sales Trading 104 90 86 50 182 2 43 57 Q211/12 Q311/12 Q411/12 Q112/13 Q212/13 Energy Sales (‘000 MWh) +75.0% YoY Own Sales Trading
  8. 8. 502 542 (20) +28 (9) 0 +40 Q2 2011/12 Price & Mix Volume Price & Mix Volume Others * Q2 2012/13 Sugarcane Brazil – Q2 Financials Record Adjusted EBITDA Mostly due to Lower Agricultural Costs * includes Cogeneration, Agricultural Products and Hedging Key Figures In R$ 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. 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. 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. 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. 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. 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$131 million Mainly allocated for (i) starch project in Brazil, (ii) capacity expansion in Europe and (iii) BENP Lillebonne gluten and glucose project  Working capital Seasonal cash requirements mostly related to the crop’s peak for the Brazilian sugarcane segment in Q2 (increasing stocks)
  14. 14. Debt Increase Mostly Due to Currency Effect, Seasonal Working Capital and Substantial Capex Effort  Net Debt / Adjusted EBITDA: 3.8x vs 3.2x in March, 2012 14 Debt In R$ 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. 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/São José 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
  16. 16. 16 Investor Relations Phone: +55 (11) 3544-4900 ir@tereosinternacional.com
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