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. Out...
Brazilian Sugarcane Production (MT)
0
100
200
300
400
500
600
700
 2011/12: first drop in sugarcane
production in 10 year...
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)
...
Source : Cepea Esalq Source : Bloomberg
Brazilian Ethanol Market
 Brazil surpassed the US as the world’s largest ethanol
...
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...
271
+34
+19
(4)
(38)
+2
284
Q3
2011/12
Brazil Indian
Ocean
Starch
Europe
Ethanol
Europe
Holding Q3
2012/13
Q3 2012/13 - Ad...
90 86
50
182
11843
57
30
Q3
11/12
Q4
11/12
Q1
12/13
Q2
12/13
Q3
12/13
91
151
115 99
143
40
40
Q3
11/12
Q4
11/12
Q1
12/13
Q...
593 577
(50)
+6
(21)
+64
(15)
Q3
2011/12
Price &
Mix
Volume Price &
Mix
Volume Others * Q3
2012/13
Sugarcane Brazil – Q3 F...
+0.2% YoY
Sugarcane Africa/Indian Ocean – Production and Q3 Financials
Another Quarter of Good Performance
10
Sugarcane Cr...
204 210 217 237 215
66 62 60
66
52
Q3
11/12
Q4
11/12
Q1
12/13
Q2
12/13
Q3
12/13
267270 272 277
303
109
134
110 109
72
62
6...
Starch & Sweeteners – Q3 Financials
Revenues Improvement on Good Sales Volumes, Helped as Well By Higher Perimeter
Key Fig...
286 265
+29
(74)
+27
(3)
Q3
2011/12
Currency Volume Price & Mix Others Q3
2012/13
Alcohol & Ethanol Europe – Q3 Financials...
14
Q3 Cash Flow Reconciliation
Ongoing Strategic Investments in Key Segments and Seasonal Working Capital
(1) Net debt as ...
Debt
Increase Mostly Due to Seasonal Working Capital, Ongoing Investments and Currency Effect
 Net Debt/Adjusted EBITDA: ...
BRAZIL
 Continue efforts on agricultural mechanization, factories automation and improvement of
processes
 Expand electr...
 Adapt to higher price levels and volatility for cereals
 Expand presence into growing markets (Brazil/China)
 Adapt pr...
 Sugarcane
 Brazil: improving outlook for sugarcane and cogeneration
• Recovery of 10% in sugarcane production in 2013/1...
19
Investor Relations
Phone: +55 (11) 3544-4900
ir@tereosinternacional.com
Upcoming SlideShare
Loading in …5
×

Tereos apresentacao 3_t13_eng

212 views

Published on

Published in: Business, Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
212
On SlideShare
0
From Embeds
0
Number of Embeds
24
Actions
Shares
0
Downloads
4
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Tereos apresentacao 3_t13_eng

  1. 1. Tereos Internacional Third Quarter 2012/13 Results São Paulo – February 15th, 2013
  2. 2. 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
  3. 3. 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/lb1 3 Weather impact in Brazil 10 15 20 25 30 35 40
  4. 4. 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
  5. 5. 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$/liter) Ethanol: Prices Dropped in Europe and US, while stable in Brazil Ethanol Prices - FOB Rotterdam & CBOT 5 1 0,50 1,00 1,50 2,00 2,50 3,00 Hydrous Anhydrous 1 1,5 2 2,5 3 3,5 350 400 450 500 550 600 650 700 750 800 €/m3 FOB Rotterdam T2 Ethanol CBOT USD/Gal.
  6. 6. 1,820 1,965 (17) +45 +138 (21) Q3 2011/12 Brazil Indian Ocean Starch Europe Ethanol Europe Q3 2012/13 1,820 1,965 +124 +33 (18) +6 Q3 2011/12 Currency Volume Price & Mix Others Q3 2012/13 Q3 2012/13 – Revenues Record Net Revenues Driven by Higher Volumes in the Starch & Sweeteners and Sugarcane Segments 6 Net Revenues (R$ 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
  7. 7. 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
  8. 8. 90 86 50 182 11843 57 30 Q3 11/12 Q4 11/12 Q1 12/13 Q2 12/13 Q3 12/13 91 151 115 99 143 40 40 Q3 11/12 Q4 11/12 Q1 12/13 Q2 12/13 Q3 12/13 375 249 251 401 380 Q3 11/12 Q4 11/12 Q1 12/13 Q2 12/13 Q3 12/13 2.6 4.7 8.1 5.4 Q3 11/12 Q4 11/12 Q1 12/13 Q2 12/13 Q3 12/13 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
  9. 9. 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$199.4 million. Net Revenues (R$ MM) Sugar Ethanol 3
  10. 10. +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% Gross Margin 35.7% 23.3% EBITDA 84 69 +23% EBITDA Margin 30.0% 29.1% Adjusted EBITDA 85 66 +29% Adjusted EBITDA Margin 30.3% 28.1% 1,173 43 116 1,267 1,176 Q3 11/12 Q4 11/12 Q1 12/13 Q2 12/13 Q3 12/13 89 77 67 76 86 Q3 11/12 Q4 11/12 Q1 12/13 Q2 12/13 Q3 12/13 Sugar Reunion 35% Sugar Mozambique 21% Trading and others 44% 3
  11. 11. 204 210 217 237 215 66 62 60 66 52 Q3 11/12 Q4 11/12 Q1 12/13 Q2 12/13 Q3 12/13 267270 272 277 303 109 134 110 109 72 62 61 70 51 58 Q3 11/12 Q4 11/12 Q1 12/13 Q2 12/13 Q3 12/13 130 171 194 180 159 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 11/12 Q1 12/13 Q2 12/13 Q3 12/13866898 924 932 968924 932 968 392 433 450 444 412 Q3 11/12 Q4 11/12 Q1 12/13 Q2 12/13 Q3 12/13 3
  12. 12. 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% Gross Margin 16.8% 17.2% EBITDA 50 57 -11% EBITDA Margin 6.0% 8.0% Adjusted EBITDA 52 56 -7% Adjusted EBITDA Margin 6.2% 8.0% 12 Net Revenues (R$ MM) +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 Currency Volume Price & Mix Others Q3 2012/13 3
  13. 13. 286 265 +29 (74) +27 (3) Q3 2011/12 Currency Volume Price & Mix Others Q3 2012/13 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$3 million, down 94% • Significant increase of raw material prices purchased at market prices • Higher unitary energy costs y-o-y 13 Net Revenues (R$ MM) 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% Gross Margin 5.0% 22.2% EBITDA 3 40 -94% EBITDA Margin 1.0% 14.0% Adjusted EBITDA 3 40 -94% Adjusted EBITDA Margin 1.0% 14.1% Alcohol & Ethanol own sales 51% Ethanol traded 37% Co-products and other 12% 3
  14. 14. 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$109 million Mainly allocated for (i) starch project in Brazil; (ii) capacity expansion in the starch & sweeteners segment and (iii) Tereos BENP product diversification (gluten / dextrose)  Working capital Seasonal cash requirements mostly related to the crop’s peak in the sugarcane division in Q3 (increasing stocks) 4
  15. 15. Debt Increase Mostly Due to Seasonal Working Capital, Ongoing Investments and Currency Effect  Net Debt/Adjusted EBITDA: 4.0x, stable sequentially considering 3.8x in Sep., 2012(1) 15 Debt In R$ 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
  16. 16. 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
  17. 17.  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
  18. 18.  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 Outlook6
  19. 19. 19 Investor Relations Phone: +55 (11) 3544-4900 ir@tereosinternacional.com

×