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  • 1. Tereos Internacional Third Quarter 2011/12 Results São Paulo - February 15th, 2012
  • 2. Quarter Highlights Q3 2011/12 Financial Results Operating Segment Review Cash Flow, Debt Position and CAPEX Outlook
  • 3. Quarter Highlights
  • 4.  Favorable sugar, starch and ethanol pricing drove double-digit revenue and EBITDA growth  Product and geographical diversification provided resilience • Strong results for Indian Ocean and European Ethanol businesses • Lower sales in Brazil following 2011/12 reduced crushing volumes  Moved forward with strategic initiatives to reinforce leadership positions and drive future growth • Acquisition of a 75% interest in a French potato starch producer – Haussimont plant • Guarani to acquire the 32.56% remaining stake of its subsidiary Andrade Açúcar e Álcool S.A. • Share capital increase of the subsidiary in Mozambique. Guarani becomes the shareholder of 99% of the Sena Holdings, in the Indian Ocean region Q3 2011/12 – Key Takeaways 4
  • 5. Q3 2011/12 - Financial Highlights 5  Strong revenue performance: R$1.8 billion… • Year-on-Year: +14.4% increase, as reported  …due to: • Increased year-on-year prices across key products categories, offsetting lower sales volumes  Record EBITDA: R$290 million • Year-on-Year: +36.6% increase, as reported  Adjusted EBITDA*: R$271 million • +4.4% Year-on-Year and +2.7% Quarter-on-Quarter  Net Result : R$75.7 million in Q3 11/12 and R$141.3 million in 9M 11/12 * Adjusted EBITDA/EBIT: EBITDA/EBIT excluding accounting effect of adjustments in the fair value of the financial instruments and of the biological assets
  • 6. Sugar:  Prices still high, despite expectations for record Northern hemisphere crops and reduced exposure of speculative  Lack of supply from Brazil, still supports higher prices Starch:  Pressure increased on corn (stock/use ratio near historical low) and declined on wheat (global balance increasing)  European corn/wheat prices again moving in tandem  Stable demand from food industry but lower volumes in the non-food industry Ethanol:  Positive changes for global trade: elimination of US import tax and the blending subsidy Limited ethanol availability supported better prices in Brazil Q3 2011/12 - Market Fundamentals 6 Source: Bloomberg
  • 7. Q3 2011/12 Financial Results
  • 8. 1591 1820 +100 (46) +259 (84) Q3 2010/11 Currency Volume Price& Mix Others Q3 2011/12 1591 (31) +5 +190 +65 1820 Q3 2010/11 Brazil Indian Ocean Starch Europe Ethanol Europe Q3 2011/12 Q3 2011/12 – Revenues Revenue increase driven by higher prices for all key products  Record Revenues of R$1.8 billion, up 14.4% Y-o-Y  Sugarcane Revenues: R$829 million • 45.5% of total revenues  Cereal Revenues: R$991 million • 54.5% of total revenues 8  Revenue growth driven by: • Higher average selling prices across all key product categories • Appreciation of the Euro against BRL • Higher sales volumes for ethanol in Europe and for sugar in Mozambique • Compensating a decline in Brazilian sugarcane production • Other revenues mostly impacted by Guarani, La Reunion and Syral +14.4% Net Revenues (R$ MM) Net Revenues (R$ MM) +14.4%
  • 9. 260 (39) +22 +21 +14 (7) 271 Q3 2010/11 Brazil Indian Ocean Starch Europe Ethanol Europe Holding Q3 2011/12 Q3 2011/12 - Adjusted EBITDA Impact of lower volumes in Brazil compensated by increase in our other activities 9  Sugarcane • Brazil: negatively impacted by lower production, which led to decline in sugar and ethanol sales, as well by hedging effect (-R$25 MM in Q3 2011/12 against +R$6 MM in Q3 2010/11) • Mozambique: higher sales volumes and prices  Cereal • Starch Europe: higher sales prices and almost no derivative impact this quarter • Ethanol Europe: higher volumes and prices  Adjustments • Biological assets (-R$20 MM) and financial instruments (+R$1 MM) in Q3 11/12 +4.4 % Margin14.9% Adjusted EBITDA (R$ MM) Margin16.3%
  • 10. Operating Segment Review
  • 11. Sugarcane Brazil - Indian Ocean
  • 12. 81 51 84 106 90 Q3 10/11 Q4 10/11 Q1 11/12 Q2 11/12 Q3 11/12 164 165 140 99 131 Q3 10/11 Q4 10/11 Q1 11/12 Q2 11/12 Q3 11/12 424 233 305 374 375 Q3 10/11 Q4 10/11 Q1 11/12 Q2 11/12 Q3 11/12 4,0 5,8 7,8 2,6 Q3 10/11 Q4 10/11 Q1 11/12 Q2 11/12 Q3 11/12 Ethanol Sales (‘000 m³) Energy Sales (‘000 MWh)Sugarcane Crushing (MM t) Sugar Sales (‘000 t) 12  Sugarcane crushing: 16.3 million tons in 2011/12 • Agricultural yield: 66.7 tons/ha in 2011/12 (below guidance, due to drought during last crop, frost & flowering during this crop)  Production mix: 62% sugar and 38% ethanol in 2011/12 crop  Inventories: • Sugar: 361,000 tons (–8.8% Y-o-Y) • Ethanol: 219,000 m³ (–9.1% Y-o-Y)  Mechanical harvesting: 88% of own sugarcane crushed in 2011/12 -35.3% YoY -11.6% YoY -20.5% YoY +11.1% YoY Sugarcane Brazil – Production & Sales Lower crushing volumes due to weather-related issues
  • 13. Sugarcane Brazil – Q3 Financials Higher prices for sugar and ethanol partially offset lower volumes * includes Cogeneration, Agricultural Products and Hedging Key Figures In R$ Million Q3 2011/12 Q3 2010/11 Change Revenues 593 624 -5.0% Gross Profit 118 163 -27.7% Gross Margin 19.9% 26.1% EBITDA 129 85 +51.4% EBITDA Margin 21.7% 13.6% Adjusted EBITDA 112 151 -25.9% Adjusted EBITDA Margin 18.9% 24.2%  Gross Profit: R$118 million • Decline of 27.7% mainly due to lower volumes  Adjusted EBITDA: R$112 million • Fair value of biological assets + R$17.3 million in Q3 2011/12 vs. –R$8.0 million in Q3 2010/11  Adjusted EBITDA Margin1 including tilling depreciation would have been 23.8%  Sugar: 66.8% of total net revenues • Volumes decreased 11.6% to 375,000 tons • Sugar prices were 12.3% higher to 1,056.1 R$/ton  Ethanol: 27.5% of total net revenues • Volume sold reduced 20.5% to 131,000 m3 • Prices stood at 1,250.7 R$/m3  Cogeneration: energy revenues remained stable at R$10.2 million 13 (1) Tereos Internacional allocates tilling expenses as cost. If tilling expenses were allocated as investment, Adjusted EBITDA would have reached R$ 141 million. Net Revenues (R$ MM) -5.0% Sugar Ethanol
  • 14. 289 17 65 315 275 Q3 10/11 Q4 10/11 Q1 11/12 Q2 11/12 Q3 11/12 874 989 898 Q3 10/11 Q4 10/11 Q1 11/12 Q2 11/12 Q3 11/12 Mozambique  Sugarcane crushing: 699,000 tons • Crop’s agricultural yields increased 14.4 ton/ha year-on-year, as a result of irrigation and planting programs  Revenues: R$38 million • 54% higher vs. Q3 2010/11 due to higher sales volumes and better prices  Adjusted EBITDA: R$21.2 million • Up R$8.4 million vs. Q3 2010/11 • 390 bps increase in adjusted EBITDA margin La Réunion  Sugarcane crushing: 1.9 million tons in 2011/12 • Stable crop compared to 2010/11  Revenues: R$198 million • Lower by R$8 million vs. Q3 2010/11 due to time of booking for shipment  Adjusted EBITDA: R$45.0 million • vs. R$31.2 million in Q3 2010/11 Sugarcane Indian Ocean – Production and Q3 Financials Better results and improved efficiencies Key Figures In R$ Million Q3 2011/12 Q3 2010/11 Change Revenues 236 231 +2.2% Gross Profit 55 78 -30.0% Gross Margin 23.3% 34,0% EBITDA 69 45 +52.4% EBITDA Margin 29.1% 19.5% Adjusted EBITDA 66 44 +50.4% Adjusted EBITDA Margin 28.1% 19.1% 14 La Réunion Sugarcane Crushing (’000 t) Mozambique Sugarcane Crushing (‘000 t) +2.7% YoY -4.8% YoY
  • 15. Cereal Starch Europe - Ethanol Europe
  • 16. 253 258 262 262 242 39 61 68 59 66 Q3 10/11 Q4 10/11 Q1 11/12 Q2 11/12 Q3 11/12 SYRAL BENP/DVO 42 44 43 48 44 Q3 10/11 Q4 10/11 Q1 11/12 Q2 11/12 Q3 11/12 398 409 440 424 392 Q3 10/11 Q4 10/11 Q1 11/12 Q2 11/12 Q3 11/12 696 696 739 720 678 Q3 10/11 Q4 10/11 Q1 11/12 Q2 11/12 Q3 11/12 Starch Europe - Production and Sales Starch volumes stable; ethanol and co-product volumes increase  Cereal grinding: 678,000 tons - 2.6% vs. Q3 2010/11 • Lower starch and sweeteners sales volume due to weaker demand from cyclical paper & corrugated board industry  Sales volumes • Starch and Sweeteners: steady volumes for food industry, but industrial demand below historical levels • Alcohol & Ethanol: better production levels and capacity utilization • Co-products: higher co-product sales due to better volumes at BENP 16 Cereal Grinding (‘000 t) Starch & Sweeteners Sales (‘000 t) Ethanol & Alcohol Sales (‘000 m3) Co-products Sales (‘000 t) -2.6% YoY -1.5% YoY +4.8% YoY +5.5% YoY
  • 17. 579 753 +63 (9) +120 Q3 2010/11 Currency Volume Price& Mix Q3 2011/12 Starch Europe – Q3 Financials Better results driven by higher prices for S&S and increased sales volumes for co-products and ethanol Starch and Sweeteners 64.9% Alcohol and Ethanol 10.5% Co-products and others 24.6% Key Figures In R$ Million Q3 2011/12 Q3 2010/11 Change Revenues* 753 579 +30.1% Gross Profit* 157 120 +30.8% Gross Margin* 20.8% 20.7% EBITDA 71 67 +5.1% EBITDA Margin 9.4% 11.6% Adjusted EBITDA 70 49 +43.0% Adjusted EBITDA Margin 9.3% 8.5% * Excludes the R$29.7 million in Q3 11/12 and R$14 million in Q3 10/11 related to financial impact of the sales of co-products produced by Tereos BENP and sold by Tereos Syral17 Net Revenues* (R$ MM) +30.1% Revenue* Breakdown by Product  Revenues*: +30.1% • Due to higher prices and sales volumes for co- products and ethanol • Currency impact: +10.8%; volume impact: -1.5%; and price impact: +20.8%  Gross Profit*: R$157 million, gross margin of 20.8%  Adjusted EBITDA: R$70 million, up R$21 million • Margin improved Y-o-Y to 9.3%
  • 18. Ethanol Europe – Q3 Financials Higher sales volumes of company-owned ethanol and higher trading sales Key Figures In R$ Million Q3 2011/12 Q3 2010/11 Change Revenues* 238 158 +51.2% Gross Profit* 28 17 +64.7% Gross Margin* 11.8% 10.8% EBITDA 26 12 +126.0% EBITDA Margin 11.0% 7.3% Adjusted EBITDA 26 12 +128.3% Adjusted EBITDA Margin 11.1% 7.4%  Ethanol sales**: 143,100 m³ • Higher sales volumes, including trading due to an excellent beet crop for Tereos  Revenues*: R$238 million, +51.2% • FX impact: +10.1% • Volume increase: +43.0% • Price decline: -2.5%  Higher production resulting from better utilization ratios  Gross profit at R$28 million and 11.8% margin  Improved Adjusted EBITDA margin 370 bps higher Y-o-Y ** Includes sales of ethanol produced by Tereos18 Net Revenues* (R$ MM) +51.2% * Excludes the R$29.7 million in Q3 11/12 and R$14 million in Q3 10/11 related to financial impact of the sales of co-products produced by Tereos BENP and sold by Tereos Syral
  • 19. Cash Flow, Debt Position and CAPEX
  • 20. 20 + 19 Fair value of biological assets: + R$20 MM Fair value of financial instruments: - R$1 MM 271 290 - 157 133 83 - 50 - 18 +11 - 17 59 76 From Adjusted EBITDA to Net Income
  • 21. Cash Flow In R$ Million Q3 2011/12 Adjusted EBITDA 271 Working capital variance (17) Other operating (including income tax paid) 19 Operating Cash Flow 273 Financial interests (53) Dividends paid and received - Capex (364) Others 14 Free Cash Flow (130) Forex impact 33 Acquisition & Perimeter impact (47) Net debt variation (144)  Main Capex • Brazil: R$ 160.6 million • Cereals: R$ 149.8 million • Indian Ocean: R$9.0 million  R$ 30.0 million acquisition of Feculerie d’Haussimont 21 Cash Flow Reconciliation Debt increase due to CAPEX programs and acquisitions
  • 22. Debt Stable leverage at 3.4x (Net Debt / Adj. Ebitda)  Net Debt increased slightly by 4.5% Q-o-Q • Higher CAPEX program and acquisitions  Net Debt / Adjusted EBITDA: 3.4x in line with 3.3x at Sept 30, 2011 (12 months Adjusted EBITDA = R$946 million) 22 Gross Debt Breakdown by Currency Leverage (R$ MM) (Net Debt/ Adjusted EBITDA) Debt In R$ Million December 31, 2011 September 30, 2011 December 31, 2010 Change YoY Current 1,471 1,435 1,645 -10.6% Non-current 2,399 2,138 1,268 89.2% Amortized cost (30) (25) (15) - Total Gross Debt 3,840 3,547 2,898 32.5% In € 1,600 1,575 1,365 17.2% In USD 1,676 1,671 573 192.5% In R$ 524 258 909 -42,4% Other currencies 70 69 66 6.1% Cash and cash Equivalent (579) (429) (299) 93.6% Total Net Debt 3,261 3,119 2,599 25.5% Related Parties Net Debt (38) (35) (29) 31.0% Total Net Debt + Related Parties 3,223 3,084 2,570 25.4%
  • 23. 118 +103 (2) +42 +58 319 Q3 2010/11 Brazil Indian Ocean Starch Europe Ethanol Europe Q3 2011/12 Capital Expenditures by Operating Segment in Q3 2011/12 Investment programs underway 23  Sugarcane Brazil: R$160.6 million • Plantation: R$32.4 million • Cogeneration and Industry: R$94.0 million • Maintenance: R$34.4 million  Sugarcane Indian Ocean: R$9.0 million • Le Reunion: R$4.2 million • Mozambique: R$4.8 million  Starch Europe: R$87.5 million • 94.4% increase over Q3 2010/11 • Marckolsheim (capacity increase for corn processing), Saragosse (cogeneration), Selby (potable alcohol)  Ethanol Europe: R$62.3 million • Equipment and building purchases for the gluten project at BENP Lillebonne (start-up in 2012) CAPEX (R$ MM) R$62 MM 20%R$87 MM 27% R$161 MM 50% R$9 MM 3% CAPEX (R$ MM)
  • 24. Outlook
  • 25. Sugarcane: focusing on operations, investing in production  Brazil: a R$800 million plan to invest in production underway Cereals: capitalizing on starch production knowledge by entering into growing economies  EU: improving mix • New Lillebonne (gluten), Selby (potable alcohol) and Haussimont (potato starch) activities to come on stream in the H1 2012  Brazil & China: exposure to high-growth, emerging market economies • Start-up of Syral-Halotek corn plant & diversification of production mix • A project to develop starch in China with Wilmar 25 Company Outlook Positioned to capture growth through a diversified product portfolio and geographical footprint
  • 26. 26 Investors Relations Phone: +55 (11) 3544-4900 ir@tereosinternacional.com