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20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
20110811 q1 201112_eng_final
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20110811 q1 201112_eng_final

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  • 1. Tereos Internacional First Quarter 2011/12 Results São Paulo - August 12th, 2011
  • 2. Highlights Q1 2011/12 Financial Results Operating Segment Review Outlook and Summary
  • 3. Highlights
  • 4. * Adjusted EBITDA/EBIT: EBITDA/EBIT excluding items from discontinued operations, accounting effect of adjustments in the fair value of the financial instruments and of the biological assets  Revenues: R$1.6 billion • Year-over-Year: + 47.4% at constant currency  Adjusted EBITDA*: R$206 MM • 2x Year-over-Year  Net profit: R$63 MM • + R$ 122 MM Year-over-Year  Record first quarter net profit due to strong increase in the operating income (+ R$93 MM)  Q1 performance driven by strong pricing environment for sugar and ethanol, as well as the positive contribution from recent acquisitions (Vertente, Mandu and GQF) Q1 2011/12 - Financial Highlights Record first quarter net profit: strong increase in operating results 4
  • 5. Q1 2011/12 - Market Fundamentals Sugar: sharp rise in world prices driven by concerns about a shortfall in Brazil  UNICA recent estimate for 2011/12 down 10.2% to 510 MM tons for CS  Raw sugar prices: + 42.9% from early May to late June Starch: cereal prices down in Europe  After the announcements in May about the end of export restrictions in Russia and Ukraine, MATIF wheat prices fell €50/ton to less than €200/ton (c20%) Ethanol: supply lags demand growth and high price environment  Brazil: prices still high due to limited supply  US Senate vote: first steps towards the drop in ethanol imports tariff and subsidies? 5
  • 6.  1st June: announcement of a R$ 49 million investment in Halotek-Fadel to enter into the starch market in Brazil  21st June: completion of the São José distillery and start of ethanol production (45,000 m³ for this first crop)  Weather pushing sugar prices up. Guarani is revising its original forecast for a 18.5 MM tons production to 17.1 MM, a 7.6% reduction and below UNICA’s recently revised forecast  30th June: payment of R$ 44.6 MM in annual dividend to shareholders • R$ 0.066 per share, a dividend yield of 2% at date of payment  3rd August, BM&FBOVESPA granted a 1-year extension to achieve 25% minimum free float (through 1st August, 2012) Q1 2011/12 Highlights 6
  • 7. Q1 2011/12 Financial Results
  • 8. Q1 2011/12 - Revenues Revenue increase driven by high sugar & ethanol prices, fueled by organic and acquisition growth 1,604 + 48% 1,081 1,604 1,081 In R$ MM + 7 + 266 - 17 + 267  Sugarcane • Revenues: R$ 648 mm + 89% vs. Q1 2010/11 at constant currency • Brazil: + 74% as reported 47% organic and 27% due to Mandu acquisition • Indian Ocean: + 169% at constant currency Driven by GQF acquisition  Cereal • Revenues: R$ 956 mm + 29% vs. Q1 2010/11 at constant currency • Starch Europe: + 32% at constant currency Mainly driven by 26% increase in selling8
  • 9. In R$ MM Adjusted EBITDA EBITDA 114 216 Q1 2011/12 - Adjusted EBITDA and EBITDA Increase led by sugarcane and European ethanol operations + 88% 9 100 206 + 107%  Sugarcane • Brazil: 12x higher as reported Higher prices and Mandu acquisition. Q1 10/11 impacted by non recurring itens • Indian Ocean: 2x higher as reported Positive contribution of GQF acquisition  Cereal • Starch: - 35% at constant currency + R$29 million from energy and logistic increases, more than offsetting high selling prices • Ethanol: 4x higher at constant currency Confirming improvement recorded in Q4 10/11 (+2%) In R$ MM
  • 10. 10 Q1 2011/12 - From Adjusted EBITDA to Net Income Record first quarter net income: strong operating income Fair value of biological assets: - R$1 MM Fair value of financial instruments: + R$11 MM In R$ MM 206 + 10 216 - 133 82 66 - 16 - 3 63 - 12 51
  • 11. Cash Flow reflecting the rise in Working Capital Cash Flow In R$ Million Q1 2011/12 Adjusted EBITDA 206 Working capital variance (232) Other operating (including income tax paid) (9) Operating Cash Flow (35) Financial interests (24) Dividends paid and received (50) Capex (239) Cash Flow before acquisition and capital increase (348) Acquisition & Perimeter impact (6) Capital increase 0 Free Cash Flow (354) Forex impact 6 Total net debt (349)  Total net debt increase (including related parties): • R$349 million vs. March 31, 2011  Capex & Acquisitions: • Brazil: R$139 million • Cereals: R$74 million • Indian Ocean: R$32 million 11
  • 12. Debt Total Net Debt: R$349 million increase vs March 31, 2011  Net Debt: R$ 2,498 + 16.2% vs March 31, 2011  Net Debt / Adjusted EBITDA: 2.6x vs. 2.5x at March 31, 2011 Gross Debt Breakdown by currency Debt In R$ Million June 30, 2011 March 31, 2011 Change Current 1,231 1,684 -26.9% Non-current 1,660 1,134 46.4% Amortized cost (26) (15) 73.3% Total Gross Debt 2,865 2,803 2.2% In € 1,484 1,364 8.8% In USD 1,033 763 35.4% In R$ 316 637 -50.1% Other currencies 32 54 -40.7% Cash and cash Equivalent (310) (633) -51.0% Total Net Debt 2,555 2,170 17.7% Related Parties Net Debt (57) (21) 185.0% Total Net Debt + Related Parties 2,498 2,149 16.2% 12 Euro 52% US Dollar 36% Real 11% Others 1%  Working capital requirements for both sugarcane and cereal divisions  Advancing to suppliers related to crushing expansion and cogeneration activity
  • 13. Operating Segment Review
  • 14. Sugarcane Brazil - Indian Ocean
  • 15. Sugarcane - Production and Sales Ethanol Sales (‘000 m³) Energy Sales (‘000 MWh)Sugarcane Crushing (MM t) Sugar Sales (‘000 t) 15 213 488 424 233 305Q1 10/11 Q2 10/11 Q3 10/11 Q4 10/11 Q1 11/12 99 179 164 165 140 Q1 10/11 Q2 10/11 Q3 10/11 Q4 10/11 Q1 11/12 42 113 81 51 84 Q1 10/11 Q2 10/11 Q3 10/11 Q4 10/11 Q1 11/12  Sugarcane crushing: 5.8 million tons - 2% vs. Q1 2010/11 Beginning of crushing period later than last crop: End of April 2011 while in the last crop it started on March 2010  Sugar production: 417,000 tons - 7% vs. Q1 2010/11 • Mix: 61% sugar and 39% ethanol  Ethanol production: 164,000 m³ - 8% vs. Q1 2010/11 • Anhydrous: 39% of total ethanol vs. 28% in Q1 2010/11 Influenced by the dry weather the sugar content in the raw material (TRS) decrease: 123 kg/ton of sugarcane during Q1 2011/12 vs.130 kg/ton of sugarcane during Q1 2010/11  Cogeneration: 84,000 MWh + 101% vs. Q1 2010/11 5,9 8,8 4,0 5,8 Q1 10/11 Q2 10/11 Q3 10/11 Q4 10/11 Q1 11/12
  • 16. Sugar Ethanol 502 288 Sugarcane Brazil - Q1 Financials Sharp improvement in revenues and Adjusted EBITDA * includes Cogeneration, Agricultural Products and Hedging Key Figures In R$ Million Q1 2011/12 Q1 2010/11 Change Reported Revenues 502 288 +74.1% Gross Profit 89 8 +11x Gross Margin 17.8% 2.8% EBITDA 136 24 +6x EBITDA Margin 27.0% 8.3% Adjusted EBITDA 112 9 +12x Adjusted EBITDA Margin 22.3% 3.3% EBIT 48 (59) +107 EBIT Margin 9.6% (20.6)% Adjusted EBIT 24 (74) +98 Adjusted EBIT Margin 4.8% (25.6)% Capex 139 75 +84.8%  Gross Profit: R$89 million • Impact of fair value of biological assets: - R$2.2 million vs. + R$20.8 million in Q1 2010/11  Adjusted EBITDA: R$112 million • Fair value of financial instruments: + R$25.8 million vs. - R$6.3 million in Q1 2010/11  Adjusted EBITDA Margin1 including tilling depreciation would be 27.3%  Sugar: 52% of total revenue • Sales volume: + 43% vs. Q1 2010/11 Mainly to export market: + 123% vs. Q1 2010/11 • Price (R$/ton): + 14% vs. Q1 2010/11 (before hedging effect)  Ethanol: 39% of total revenue • Sales volume: + 42% vs. Q1 2010/11 Higher volume in domestic market • Price (R$/m³): + 80% vs. Q1 2010/11  Capex: R$139 million • Plantation: R$43 million • Expansion and cogeneration: R$60 million In R$ MM Revenues 16 + 25 + 87 + 61 + 58 - 17 (1) Tereos Internacional allocates tilling expenses as cost. If tilling expenses were allocated as investment, Adjusted EBITDA would have reached R$137 million.
  • 17. Mozambique  Anticipated crop with sugarcane crushed in Q1 • 2011/12 crushing season began this year on May 10th • Quarter agricultural yields reached 99 ton/ha vs 75 ton/ha as a result of irrigation and planting program  Revenues: R$4 million • Stable vs. Q1 2010/11  Adjusted EBITDA: - R$11.9 million • Up R$3.1 million in Q1 2010/11 in a seasonally low quarter  Capex: R$5.1 million La Réunion  No sugarcane crushed in Q1 • Crushing period runs from July to end-December  Revenues: R$142 million • + R$92 million vs. Q1 2010/11 • GQF acquisition impact  Adjusted EBITDA: R$18.8 million • vs. R$8.0 million in Q1 2010/11  Capex: R$27.3 million • + R$21 million vs. Q1 2010/11 Sugarcane Indian Ocean - Production - Q1 Financials Increase in prices and perimeter effect Key Figures In R$ Million Q1 2011/12 Q1 2010/11 Revenues 146 54 Gross Profit 20 (1) Gross Margin 14.0% (2.1)% EBITDA 8 1 EBITDA Margin 5.4% 2.5% Adjusted EBITDA 7 (7) Adjusted EBITDA Margin 4.7% (13.0)% Capex 32 13 La Réunion Sugarcane Crushing (’000 t) Mozambique Sugarcane Crushing (‘000 t) 17 1.003 874 Q1 10/11 Q2 10/11 Q3 10/11 Q4 10/11 Q1 11/12 230 289 17 65 Q1 10/11 Q2 10/11 Q3 10/11 Q4 10/11 Q1 11/12
  • 18. Cereal Starch Europe - Ethanol Europe
  • 19. Starch Europe - Production and Sales Higher wheat grinding mainly impacting co-products volumes Co-products Sales (‘000 t)Cereal Grinding (‘000 t) Starch & Sweeteners Sales (‘000 t) Ethanol & Alcohol Sales (‘000 m3) Cereal grinding: 739,000 tons + 7% vs. Q1 2010/11 More wheat ground: different mix of products Lesser impact in starch and sweeteners volumes and higher impact in co-products Sales Volumes • Starch and Sweeteners: + 0.7% vs. Q1 2010/11 • Alcohol & Ethanol: - 5% vs. Q1 2010/11 • Co-products: + 10% vs. Q1 2010/11 19 693 702 696 696 739 Q1 10/11 Q2 10/11 Q3 10/11 Q4 10/11 Q1 11/12 437 424 398 409 440 Q1 10/11 Q2 10/11 Q3 10/11 Q4 10/11 Q1 11/12 45 46 42 44 43 Q1 10/11 Q2 10/11 Q3 10/11 Q4 10/11 Q1 11/12
  • 20. Starch Europe - Q1 Financials Higher COGS due to energy, raw material and logistics expenses Revenues In R$ MM Q1 2010/11 Currency Volume Price & Mix Q1 2011/12 739 577 Starch and Sweeteners 62.8% Alcohol and Ethanol 9.4% Co- products 26.4% Others 1.4% Key Figures In R$ Million Q1 2011/12 Q1 2010/11 Change Reported Change Constant Currency Revenues* 739 577 +28.1% +27.0% Gross Profit* 161 172 -6.4% -7.5% Gross Margin* 21.8% 29.8% EBITDA 49 89 -45.1% -45.6% EBITDA Margin 6.4% 15.5% Adjusted EBITDA 64 98 -34.6% -35.1% Adjusted EBITDA Margin 8.4% 17.0% EBIT 20 60 -67.0% -67.2% EBIT Margin 2.6% 10.5% Adjusted EBIT 35 69 -49.2% -49.6% Adjusted EBIT Margin 4.6% 12.0% Capex 40 22 +82.8%  Revenues: + 27.0% at constant currency • + 21.5% in prices and mix. Cereal prices increases mostly passed through to customers • + 5.5% in volumes  Gross Profit: - R$11 million • Increasing energy costs of R$20 million  Adjusted EBITDA: R$64 million, down R$34 million • Increasing logistic expenses of R$9 million + 5 + 32 + 125 * Excludes the R$ 30.5 million financial impact of the sales of co- products produced by Tereos BENP and sold by Tereos Syral20
  • 21. Ethanol Europe - Q1 Financials Second consecutive quarter of solid performance after technical improvements Key Figures In R$ Million Q1 2011/12 Q1 2010/11 Change Reported Change Constant Currency Revenues* 218 162 +34.4% +33.0% Gross Profit* 33 12 +181.4% +176.7% Gross Margin* 15.3% 7.3% EBITDA 27 7 +4x +4x EBITDA Margin 14.3% 4.1% Adjusted EBITDA 27 7 +4x +4x Adjusted EBITDA Margin 14.3% 4.1% Capex 34 7 +5x  Ethanol sales*: 129,000 m³ • Slightly lower than Q1 2010/11. Increase in production practically offsetting a decrease in trading activities  Revenues: + 34% • FX impact: + 1% • Volumes slight increase : + 2% • Prices increase: +31%  EBITDA and Gross Profit for the quarter stable if compared to Q4 2010/11  Solid operating performance after an atypical year, with record production volumes posted for the second consecutive quarter  Capex: R$34 million • Gluten project to start up in Q1 in 2012/13 * Includes sales of ethanol produced by Tereos Revenues In R$ MM Q1 2010/11 Currency Volume Price & Mix Q1 2011/12 218 162 21 + 2 + 3 + 51 * Includes the R$ 30.5 million financial impact of the sales of co- products produced by Tereos BENP and sold by Tereos Syral
  • 22. Outlook and Summary
  • 23. Tereos Internacional - Conclusion  Investing in future growth through: • Increasing our sugarcane capacity: brownfield investments (+ 3.5 million tons) in our existing mills and through cogeneration operations (4 times growth) • Entering the Brazilian starch market to benefit from greater margin potential  Positive market outlook: • Sugar: lower crop estimates for Brazil expected to sustain high world sugar price levels • Ethanol: tight supply combined with increasing flex-fuel fleet in Brazil expected to maintain ethanol prices at current level • Starch: isoglucose prices shall be supported by higher sugar prices 23
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