2009/10 Results
May 26th, 2010
This presentation contains forward-looking statements related to the prospects of our business and estimates for operating...
Guarani:
A step change to accelerate growth
Guarani’s Transforming Steps
 February 23, 2010: JV with Humus in Vertente
 An important partnership that strengthens Gu...
Operating and Financial
Performance in 2009/10
 Record net revenues of R$ 1.4 billion: +16.1% driven by higher sugar and ethanol
prices, despite decrease in volume sold...
 During the 2009/10 Brazilian crop, sugar prices reached their highest levels in 28 years (from 12.7 US$ cents/lb in Apri...
Key Business Highlights – 2009/10 Ethanol Market Overview
Higher prices due to lower production combined with rising deman...
Sugarcane Crushed
(MM t)
 Guarani’s sugarcane crushing reached 14.5 million tons in the period from April, 2009 to March,...
10
 Although the production mix was geared towards sugar, the lower level of sugar content in sugarcane resulted in a 13....
Net Revenues
Record net revenues of R$ 1.4 billion
11
 Increase of 16.1% in net revenues to R$1,359.4 million, as a resul...
Adjusted EBITDA
Increase of 94.6% to R$334.9 million and EBITDA margin of 24.6% in 2009/10
12
Adjusted EBITDA
(R$ MM)
 Ad...
(13.6)
(79.7)
(191.6)
104.0
2008/09 2009/10
Mozambique Brazil
Net Results
Return to net profit in 2009/10
13
Consolidated
...
Foreign
Currency
65%
BRL
35% Current
52%
Non-
Current
48%
Net Debt
Improvement of net debt/Adjusted EBITDA ratio to 3.4x
1...
 CAPEX impacted by acquisition of a 50% stake in the Vertente plant for R$105.4 million
 During 2009/10, investments wer...
Outlook: Improved growth prospects
on the back of transforming steps
100
120
140
160
180
30
40
50
60
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09
09/10
10/11E
Produc/Cons...
18
Outlook
Improved growth prospects on the back of transforming steps
 Increase of sugarcane crushing capacity: Guarani ...
Thank You!
 phone: +55 (11) 3544-4900
 e-mail: ri@aguarani.com.br
 website: www.acucarguarani.com.br/ir
 Jacyr S. Cost...
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200910 conference call presentation

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200910 conference call presentation

  1. 1. 2009/10 Results May 26th, 2010
  2. 2. This presentation contains forward-looking statements related to the prospects of our business and estimates for operating and financial results. Those related to growth prospects of Açúcar Guarani S.A. are merely projections and, as such, based exclusively on the expectations of the management concerning the future of the business. Such forward-looking statements depend substantially on changes in market conditions, government regulations, competitive pressures, the performance of the Brazilian and international economies and the industry and are therefore subject to change without prior notice. Note: These consolidated financial statements are in accordance with International Financial Reporting Standards (IFRS), except where otherwise indicated. Annual data refers to the period from April to March. The information contained herein has been prepared by the Tereos Group solely for use at presentations held in connection with the corporate reorganization of the Tereos Group (the “Transaction”). Tereos Group announced that it contemplates a primary offering of shares of Tereos Internacional, after completion of the corporate reorganization, and subject to market conditions. Investors must carefully read the prospectuses, especially the "risk factors" section prior to making any investment in Tereos Internacional's shares, if and when any offering is actually implemented takes place. This presentation does not constitute an offer to sell or a solicitation of offers to purchase or subscribe for, any shares in Açucar Guarani S.A. (“Guarani”) or Tereos Internacional. Any such offer or sale will take place by means of separate offering documents, including prospectuses subject to approval by the Comissão de Valores Mobiliários (CVM) and Autorité des Marchés Financiers (AMF) in the event of offers to the public in Brazil and/or France, respectively. Neither Guarani’s nor Tereos Internacional’s shares have been or will be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and they may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. The information included in this presentation contains certain forward-looking statements, including statements with respect to management’s intentions, beliefs or current expectations concerning among other things, Guarani’s and Tereos Internacional’s growth prospects and strategies and future growth in the sugar, starch and ethanol markets worldwide. Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of various factors, such as market conditions, government regulations, competitive pressures, the performance of the Brazilian and global economies and the sugar, starch and ethanol industries. You are cautioned not to place undue reliance on those forward looking statements, which speak only as of the date hereof. No representation or warranty, either express or implied, is made as to the accuracy, reliability or completeness of the information presented herein. The information herein is only a summary and does not purport to be complete. Any opinion expressed herein is subject to change without notice, and Tereos and its subsidiaries are under no obligation to update or keep current the information herein. Tereos and its affiliates, agents, directors, partners and employees accept no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this material. This presentation contains information about Tereos Internacional's markets, including its competitive positions. Unless otherwise specified, this information is based on estimates prepared by the group and is purely indicative. These estimates are based on information obtained from customers, suppliers, business organizations and other market participants. The group considers that these estimates are reasonable as of the date of this presentation; however, the completeness and accuracy of the data underlying the estimates is not guaranteed and the group can offer no assurance that it has applied the same market definitions as its competitors. This presentation includes unaudited pro forma financial information relating to Tereos Internacional. This information is presented for illustrative purposes only and is not indicative of the results of operations or the financial condition of Tereos Internacional that would have been achieved had the creation of Tereos Internacional been completed as of an earlier date nor is it indicative of its future results of operations or financial condition. This presentation includes information relating to Groupe Quartier Français, which is in the process of being acquired by Tereos and to the structure and reorganisation of Tereos Internacional’s Indian Ocean Pole following completion of this acquisition. This acquisition remains subject to the approval of the French anti trust authorities Disclaimer
  3. 3. Guarani: A step change to accelerate growth
  4. 4. Guarani’s Transforming Steps  February 23, 2010: JV with Humus in Vertente  An important partnership that strengthens Guarani’s market position  Guarani acquires a 50% stake in Vertente, located in the same cluster as Guarani’s five plants in Brazil  Vertente will produce approximately 117,000 tons of sugar and 72,000m3 of ethanol in the 2010/11 crop, adding 1.8 million tons of crushing capacity  March 29, 2010: Creation of Tereos Internacional, a global leader in food ingredients and bioenergy  Combination of Guarani in Brazil and Tereos Group’s European cereal assets and Indian Ocean sugarcane assets to produce sugar, ethanol and starch-based products  Tereos Internacional would have pro forma annual sales of approximately US$2.5 billion1 and EBITDA of US$366 million1 (considering the year ended 30 September 2009)  With headquarters in Sao Paulo, Brazil, Tereos Internacional envisages a dual listing on BM&FBOVESPA and NYSE Euronext Paris  May 01, 2010: Petrobras and Tereos Internacional jointly invest in Guarani to accelerate growth in the sugarcane and biofuel industry  A transforming step for Brazil’s sugarcane industry  Equity investment of up to R$2.2 billion to allow Guarani to be a leading player in the rapidly consolidating Brazilian sugar and ethanol industry  A win-win partnership 4 (1) Unaudited figures
  5. 5. Operating and Financial Performance in 2009/10
  6. 6.  Record net revenues of R$ 1.4 billion: +16.1% driven by higher sugar and ethanol prices, despite decrease in volume sold due to bad weather conditions  Sharp improvement in 2009/10 Adjusted EBITDA: +94.6% to R$334.9 million and Adjusted EBITDA margin of 24.6% compared to 14.7% in 2008/09 (under IFRS)  Return to net profit of R$24.3 million in 2009/10 vs. a net loss of R$205.2 million in 2008/09 restated under IFRS for the previous period  Negative net result of Mozambican operations of R$79.7 million following dry weather and currency depreciation (R$37.3 million)  Improved indebtedness ratio: Net debt at R$1.1 billion, a slight increase of 4.0% (including R$396.3 million related to intercompany loans) compared to previous quarter and 14.0% to previous year  2009/10 CAPEX at R$277.3 million  Acquisition of a 50% stake in the Vertente plant (R$105.4 million)  Focus on capacity expansion in São José and a new sugar factory bulding and added capacity in Tanabi 6 Key Financial Highlights Record net revenues and strong Adjusted EBITDA in 2009/10 R$ Million YTD 09/10 08/09 Revenues 1,359.5 1,170.7 Adjusted EBITDA EBITDA Margin 334.9 24.6% 172.1 14.7% Net Income Net Margin 24.3 1.8% (205.2) -17.5% CAPEX 277.3 249.7 Net Debt 1,145.3 1,004.5
  7. 7.  During the 2009/10 Brazilian crop, sugar prices reached their highest levels in 28 years (from 12.7 US$ cents/lb in April, 2009 to 29.9 US$ cents/lb in January, 2010), sustained by a significant deficit in world production  However, prices declined in the past quarter to 16.6 US$ cents/lb at the end of March, 2010 as a result of: a) Expectation of a recovery in India’s sugar production b) Expectation of a better crop in Brazil (34 million tons) c) Speculative movements by funds, resulting in a sell-off movement  Domestic prices remained sustained (+57.9% in average vs 2008/09 for Guarani), even when international prices fell, as a result of low availability of high quality sugar 7 Key Business Highlights – 2009/10 Sugar Market Overview Drop in sugar prices in the past quarter from record levels Guarani’s Sugar Prices (R$/ton) Note: Actual average price net of taxes 400 650 900 1150 Q107/08 Q207/08 Q307/08 Q407/08 Q108/09 Q208/09 Q308/09 Q408/09 Q109/10 Q209/10 Q309/10 Q409/10
  8. 8. Key Business Highlights – 2009/10 Ethanol Market Overview Higher prices due to lower production combined with rising demand 8  During the 2009/10 crop, ethanol prices were on average above the previous crop, but with month-on-month volatility:  Significant flex-fuel vehicle sales combined with attractive price parity versus gasoline  Lower ethanol production (-5.6%) vs. 2008/09 crop  Prices have declined recently, but are still higher than the same period of last year  Exports were lower than 2008/09 due to rising domestic demand and lower prices in overseas markets Guarani’s Ethanol Prices (R$/m³) Note: Actual average price net of taxes 400 600 800 1000 1200 Q107/08 Q207/08 Q307/08 Q407/08 Q108/09 Q208/09 Q308/09 Q408/09 Q109/10 Q209/10 Q309/10 Q409/10
  9. 9. Sugarcane Crushed (MM t)  Guarani’s sugarcane crushing reached 14.5 million tons in the period from April, 2009 to March, 2010 (+100,000 tons) of which 14.2 million tons from April, 2009 to January, 2010 and 0.3 million tons during March, 2010 – despite heavy rains in Brazil and drought in Mozambique  Sharp impact on sugar content (-6.2%), slightly compensated by improvements in sugarcane yields  Taking into account the Vertente plant, Guarani’s sugarcane crushing reached 16.1 million tons in 2009/10  Mechanical harvesting represented 68% of own sugarcane harvested by Guarani Sugarcane Crushing Record level, despite adverse weather conditions 9 4.1 4.2 10.3 10.3 2008/09 2009/10 Own 3rd Party 14.514.4
  10. 10. 10  Although the production mix was geared towards sugar, the lower level of sugar content in sugarcane resulted in a 13.9% reduction in sugar production  White sugar (refined + crystal) represented more than 90% of total sugar production  Ethanol production was less impacted with a slight decrease of 2.8%  Following the market trend, ethanol production was mainly hydrous (around 75%), however anhydrous ethanol production increased by 9.0% to benefit from its premium compared to hydrous  Sugar accounted for 55.9% of the total TRS with the remaining 44.1% for ethanol Sugar and Ethanol Production Lower sugar and ethanol production due to low sugar content in raw material Sugar Production (’000 t) Ethanol Production (’000 m³) 565 456 443 461 149 79 2008/09 2009/10 Refined Crystal VHP 1,157 996 111 121 385 361 2008/09 2009/10 Anhydrous Hydrous 482496
  11. 11. Net Revenues Record net revenues of R$ 1.4 billion 11  Increase of 16.1% in net revenues to R$1,359.4 million, as a result of higher prices, despite lower output  Sugar (+29.1%): on a 40.1% price increase and affected by a 7.9% decrease in volumes  Ethanol (+5.9%): positive price impact of 14.4% and 7.4% negative volume effect  Energy (+24.0%): growth of energy sold to the grid (+22.8%) and relatively stable prices (+1.0%)  In 2009/10, sales were tilted towards the domestic market to benefit from higher prices:  Sugar: 63.0% domestic market (6.9% price premium vs. exports)  Ethanol: 83.9% domestic market (32.9% price premium vs. exports)  Negative effect of R$39.2 million related to hedging vs. a positive R$0.8 million effect in 2008/09 Net Revenues (R$ MM) 1 (39) 709 915 378 40084 84 2008/09 2009/10 Hedge Sugar Ethanol Others 1,171 1,359
  12. 12. Adjusted EBITDA Increase of 94.6% to R$334.9 million and EBITDA margin of 24.6% in 2009/10 12 Adjusted EBITDA (R$ MM)  Adjusted EBITDA nearly doubled from R$172.1 million and 14.7% margin in 2008/09 (under IFRS)  Positively impacted by: a) higher sugar (+40.1%) and ethanol (+14.4%) prices; b) financial instruments (options) gain of R$36.8 million; and c) fair value adjustments of biological assets of R$42.4 million (under IFRS)  Negatively impacted by: a) increased costs of 3rd party sugarcane (+22.7% on a unitary basis); b) high costs in Mozambique operations (that resulted in a negative R$8.8 million Adjusted EBITDA); c) Impact of lower sugar content on production costs 163.9 343.7 8.2 (8.8) 14.7% 24.6% -1,0% 1,0% 3,0% 5,0% 7,0% 9,0% 11,0% 13,0% 15,0% 17,0% 19,0% 21,0% 23,0% 25,0% -50,0 0,0 50,0 100,0 150,0 200,0 250,0 300,0 350,0 400,0 2008/09 2009/10 Brazil Mozambique Adjusted EBITDA Margin
  13. 13. (13.6) (79.7) (191.6) 104.0 2008/09 2009/10 Mozambique Brazil Net Results Return to net profit in 2009/10 13 Consolidated Net Profit R$24.3 million Net Profit (R$ MM) 2008/09 and 2009/10  In 2009/10, Guarani posted a net profit of R$24.3 million vs. a net loss of R$205.2 million in 2008/09 restated under IFRS  The result of Brazilian operations totaled a net profit of R$104.0 million impacted by  Currency appreciation: R$116.7 million in 2009/10 vs. -R$274.1 million impact of currency depreciation in 2008/09  Solid operating results  A R$25.5 million loss related to the sale of some biological assets  Net loss of R$79.7 million in Mozambique due to lower production and currency depreciation (R$37.3 million) R$(205.2) million
  14. 14. Foreign Currency 65% BRL 35% Current 52% Non- Current 48% Net Debt Improvement of net debt/Adjusted EBITDA ratio to 3.4x 14  Net debt of R$1.1 billion as of March, 2010 (+14.0%) compared to last year impacted by:  Payment of the 50% stake in Vertente mill  Improvement of net debt/Adjusted EBITDA ratio to 3.4x in March, 2010 vs. 4.5x in December, 2009 (and 5.8x in March, 2009) driven by solid Adjusted EBITDA  Short-term debt net of cash and cash-equivalents totaled R$386.8 million, down only 2.7% versus R$397.5 million at December, 2009  Strengthened cash position of almost R$200 million to cover higher-cost short term debts Net Debt per Currency Net Debt per Term Note: Includes debt related to SHL in Mozambique Note: Excludes intercompany loans. Net of cash & cash equivalents
  15. 15.  CAPEX impacted by acquisition of a 50% stake in the Vertente plant for R$105.4 million  During 2009/10, investments were made to increase sugarcane crushing capacity, mainly in São José and Tanabi plants (+1.0 MM tons), through industrial investments  Expansion of Guarani’s sugar production capacity by 110,000 tons through a new factory at the Tanabi plant  During Q4 09/10, Guarani focused on plantation CAPEX to ensure adequate raw material availability and productivity for the next crop  Increase of investments in Mozambique in new plantation areas and irrigation to enhance yields in the coming crops CAPEX Focus on increasing production capacity 15 Tanabi Cruz Alta São José São Paulo Duque de Caxias Andrade MS Santos PortParaná State Paranaguá Port Severínia Vertente São Paulo State Guarani’s Plant Distribution Center
  16. 16. Outlook: Improved growth prospects on the back of transforming steps
  17. 17. 100 120 140 160 180 30 40 50 60 98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11E Produc/Cons(MMton) Inventories(MMton) Inventories Production Consumption Source: LMC Sugar and Ethanol Market Outlook Return to a surplus scenario with pressured prices for sugar and sustained domestic demand for ethanol 17 SUGAR A pressured short-term scenario  Global sugar deficit may reach 4.7 million tons in 2009/10 and in the next crop is expected to produce a surplus of 3.1 million tons (LMC estimates)  But, demand continues to grow (estimate of 2.3% rise in 2010/11 vs 2009/10)  Stock-to-use ratio remains tight (below 20% at the end of March, 2010 – the lowest level ever seen) World Sugar Balance Vehicle Sales per Fuel Type (Brazil) 0 50 100 150 200 250 300 350 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 '000units Ethanol + Flex-Fuel Gas + Diesel Q209 Q110Q109 Q309 Q409 Source: Anfavea Q210 Q310 Q410 ETHANOL  Expectation of sustained domestic demand for ethanol due to attractive ratio between ethanol and gasoline prices at the pump  Flex-fuel vehicles, currently representing 40% of light vehicle fleet, to reach roughly 50%, driving ethanol consumption growth  Global demand is expected to increase due to environmental programs mainly in the US (already 10% mix currently) and Europe (10% mix in 2020)
  18. 18. 18 Outlook Improved growth prospects on the back of transforming steps  Increase of sugarcane crushing capacity: Guarani estimates that its sugarcane crushing will reach 17.2 million tons in 2010/11 in Brazil and Mozambique, including Vertente  Increase of mechanical harvesting capacity: During this crop, around 75% of total sugarcane crushed by Guarani will be harvested mechanically (own sugarcane and third-party suppliers)  Investments in Sena plant (Mozambique): Focus on CAPEX aiming at improving yields and ensuring sugarcane availability through irrigation projects and enhanced plantation area to “renew” the sugarcane fields  Expand cogeneration capacity: Guarani has registered five projects in the next Renewable Energy Auction, to be held in June 2010, totaling an offer of 187 MW (equivalent to 639 GWh)  Improve financial structure: Through the partnership with Petrobras announced in May, 2010 that will result in an equity injection of up to R$ 2.2 billion over five years, out of which R$1.6 billion from Petrobras Biocombustível, with first investment of R$682.5 million made in May, 2010  Play a key role in the growth and consolidation of the sugarcane industry: Through the creation of Tereos Internacional and the partnership with Petrobras
  19. 19. Thank You!  phone: +55 (11) 3544-4900  e-mail: ri@aguarani.com.br  website: www.acucarguarani.com.br/ir  Jacyr S. Costa Filho CEO  Reynaldo F. Benitez CFO and Investor Relations Officer  Alexandre L. Menezio Investor Relations Manager  Felipe F. Mendes Investor Relations Analyst  Renato N. Zanetti Neto Investor Relations Analyst

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