Confcall earnings release presentation 3 q 1011

118 views

Published on

Published in: Business, Technology
  • Be the first to comment

  • Be the first to like this

Confcall earnings release presentation 3 q 1011

  1. 1. Tereos Internacional Third Quarter 2010/11 Results São Paulo - February 15, 2011
  2. 2. Highlights Q3 2010/11 Financial Results Operating Segment Review Outlook and Summary
  3. 3. Q3 Financial Highlights: Record net income and strong growth in revenues Strong growth in revenues and operational results Record net result of R$ 143 million Revenue : R$1.59 billion • Year-on-Year: + 31.3% + 47.7% at constant currency 3 * Adjusted EBITDA : EBITDA excluding non recurring items from discontinued operations, accounting effect of the adjustment in the fair value of the biological assets and financial instruments Adjusted EBITDA*: R$260 MM • Year-on-Year: + 28.2% + 34.7% at constant currency Net Result: R$143 MM vs. R$14 MM in Q3 2009/10 Sugarcane: Significant growth fueled by capacity investments, acquisitions and strong market conditions Cereal: Initial contribution from new contracts and strong demand benefits revenues
  4. 4. Sugarcane Strong market fundamentals • Brazilian Center South: crushing and sugar production below estimates due to dry weather • Sugar prices back to levels seen during Q4 2009/10 on concerns over reduced availability • Rising ethanol prices: + 21.5% for hydrous in Q3 • Reduced supply due to high sugar prices and strong domestic demand Investment Agreement with Petrobras Biocombustível: completion of second step Q3 Highlights: Strong market fundamentals for Sugar, Challenging environment for Cereals 4 • Petrobras now shareholder of Guarani at 26.5% Cereal Challenging market environment, due to the increase in cereal prices • Wheat: prices increased in December on concerns over poor weather conditions in certain producing countries combined with lower US corn crop forecasts • Starch & sweeteners: improving market conditions in Europe. Positive Q3 demand mitigated traditional seasonal slowdown • Ethanol: rising prices driven by tighter supply-demand balance Studying R$ 230 MM investment to establish Brazilian starch operation
  5. 5. Q3 2010/11 Financial Results
  6. 6. 1,212 1,591 (135) + 349 + 165 612 593 63 231 344 624 Brazil Indian Ocean Starch Europe Ethanol Europe Total Holdings In R$ MM 1,591 + 31.3% 1,212 Revenues driven by positive contribution from sugarcane Q3 Q3 2009/10 Currency Volume Price & Mix Q3 2010/11 193 143 Q3 2009/10 Q3 2010/11 6 Sugarcane • Brazil: growth driven by a 50.1% increase in sales volumes and a price increase of 10.2% • La Réunion: contribution of GQF acquisition Cereal • Starch Europe: + 14.4% at constant exchange rate. Prices up 5.7% driven by application of first contracts negotiated after cereal prices increase. Negative currency effect of R$94.2 million • Ethanol Europe: - 12.8% at constant exchange rate. Volumes down due to 3-week maintenance stoppage at the Lillebonne plant. Negative currency effect of R$28.8 million
  7. 7. 78 67 45 76 85 83 49 44 112 151 Brazil Indian Ocean Starch Europe Ethanol Europe Total Holdings Ajusted EBITDA and EBITDA: Solid rise driven by Sugarcane Q3 In R$ MM + 28.2% 202 260 Adjusted EBITDA EBITDA In R$ MM + 22.5% 173 212 319 12 Q3 2009/10 Q3 2010/11 319 12 49 -12 Q3 2009/10 Q3 2010/11 Sugarcane • Higher volumes and margins in Brazil • Improved operational results in Mozambique and first contribution of the Groupe Quartier Français in La Réunion • Fair value of financial instruments negative R$58 million following surge in world sugar prices • Fair value of biological assets negative R$7 million Cereal • Starch: margins reflect higher cereal and energy prices after surge in world cereal prices • Ethanol: margins impacted by lower volumes and higher energy costs • Fair value of financial instruments positive R$18 million following surge in cereal and energy prices 7
  8. 8. 260 212 156 131 167 143 -48 71 -25 35 -24 From Adjusted EBITDA to Net Income Q3 2010/11 In R$ MM Perimeter and other adjustments in Brazil: +R$44 million Fair value of biological assets: -R$7 MM Fair value of financial instruments: -R$40 MM Accounting impact of the difference between the price paid for Quartier Français and its equity value -127 -25 Adjusted EBITDA Adjustments EBITDA Depreciation & Amortization Acquisition Impact Operating Income Net Financial Expenses Net Income Before Tax Income Tax Net Income Minority Interest Net Income Group Share 8
  9. 9. Cash Flow reflecting the rise in Working Capital Cash Flow In R$ Million Q3 2010/11 Adjusted EBITDA 260 Working capital variance (298) Other operating (1 ) Operating Cash Flow (39) Financial interests net of dividends paid and received (35) Capex net of proceeds from the disposal of assets (140) Total net debt increase: R$153 million vs. September 30, 2010 Working capital variance: • R$181 million in Brazil • R$70 million in La Réunion 9 Capex (145) Proceeds from the disposal of assets 5 Cash Flow before acquisition and capital increase (213) Acquisition & Perimeter impact 30 Capital increase 0 Free Cash Flow (183) Forex impact 30 Total net debt (153) • R$70 million in La Réunion • R$51 million for Cereal segment
  10. 10. Real 31% Others 2% Debt – Stable Net Debt/ Adjusted EBITDA from last quarter, despite seasonal increase in working capital Gross Debt Breakdown by currency Debt In R$ Million Dec 31, 2010 Sep 30, 2010 Change Current 1,645 1,667 - 1.3% Non-current 1,268 1,236 + 2.6% Amortized cost (15) (16) - 6.2% Total Gross Debt 2,914 2,903 + 0.4% In € 1,365 1,388 - 1.7% In USD 573 757 - 24.3% In R$ 909 703 + 29.3% Euro 47% US Dollar 20% 10 Net Debt: R$2,570 million + 6.4% vs. September 2010 Net Debt/ Adjusted EBITDA: stable at 3.4x In R$ 909 703 + 29.3% Other currencies 66 55 + 20.0% Cash and cash Equivalent (299) (440) - 48.0% Total Net Debt 2,599 2,447 + 6.2% Related Parties Net Debt (29) (31) - 6.4% Total Net Debt + Related Parties 2,570 2,416 + 6.4%
  11. 11. Operating Segment Review
  12. 12. SugarcaneSugarcane Brazil - Indian Ocean
  13. 13. Sugarcane – Sharply increased sugar and ethanol sales due to commercial strategy of maximized sales in the intercrop season Production and Sales Ethanol Sales (‘000 m³) Energy Sales (‘000 MWh)Sugarcane Crushing (MM t) Sugar Sales (‘000 t) 3,9 0,4 5,9 8,8 4,0 Q3 09/10 Q4 09/10 Q1 10/11 Q2 10/11 Q3 10/11 267 238 213 488 424 Q3 09/10 Q4 09/10 Q1 10/11 Q2 10/11 Q3 10/11 120 120 99 179 164 Q3 09/10 Q4 09/10 Q1 10/11 Q2 10/11 Q3 10/11 32 7 42 113 81 Q3 09/10 Q4 09/10 Q1 10/11 Q2 10/11 Q3 10/11 13 Q3 Sugarcane crushing: 4.0 million tons (+ 2.7% year-on-year) Stable product mix despite recent acquisitions: 57% sugar and 43% ethanol • Increased sugar production capacity in São José and Cruz Alta and start up of Tanabi’s sugar factory 2010/11 crop year outlook: • Crop year 2010/11: 19.7 million tons, + 43% year-on-year • Third-party sugarcane: 65% • Product Mix : 58% sugar and 42% ethanol • Sugar production: 1,556 thousand tons, + 65% | Ethanol production: 692 000 m³, + 47% • Cogeneration: 235.4 GWh, +112.5% (April to December)
  14. 14. Sugarcane Brazil – Strong rise in revenues and Adjusted EBITDA Financials Key Figures In R$ Million Q3 2010/11 Q3 2009/10 Change Reported Revenues 624 344 + 81.7% Gross Profit 163 61 + 166.5% Gross Margin 26.1% 17.8% EBITDA 85 76 + 12.4% EBITDA Margin 13.6% 22.0% Adjusted EBITDA 151 112 + 35.0% Adjusted EBITDA Margin 24.2% 32.6% EBIT 17 30 - 41.0% EBIT Margin 2.8% 8.6% Adjusted EBIT 84 66 + 26.8% Adjusted EBIT Margin 13.4% 19.2% In R$ MM Revenues 344 624 +19 +150 +12 +45 +54 * 14 * includes Cogeneration, Agricultural Products and Hedging Adjusted EBIT Margin 13.4% 19.2% Capex 58 14 + 314.3% Gross Margin: increased from R$61 million to R$163 million • Effect of the adjustment in sugarcane prices of R$49 million, correlated to the increase in sales prices Capex: • Cogeneration • Q3 2010/11: R$58 million Sugar: 63.8% of total revenue • Sales volume: + 58.7% vs. Q3 2009/10 • Price (R$/ton): + 13.6% vs. Q3 2009/10 • White sugar mix down to 78% Ethanol: 26.8% of total revenue • Sales volume: + 37.4% vs. Q3 2009/10 • Price (R$/m³): + 11.0% • Anhydrous: 40.8% of total ethanol produced vs. 25.0% in Q3 2009/10 Sugar Ethanol Q3 2009/10 Price&Mix Volume Price&Mix Volume Others Q3 2010/11*
  15. 15. Sugarcane Indian Ocean – Strong results Production and Financials Key Figures In R$ Million Q3 2010/11 Q3 2009/10 Revenues 230 63 Gross Profit 78 (26) Gross Margin 34.0% -41.3% EBITDA 45 - EBITDA Margin 19.5% - Adjusted EBITDA 44 (11) Adjusted EBITDA Margin 19.1% -18.5% Capex 11 1 La Réunion Sugarcane Crushing (’000 t) Mozambique Sugarcane Crushing (‘000 t) 547 989 874 Q3 09/10 Q4 09/10 Q1 10/11 Q2 10/11 Q3 10/11 175 0,0 0,0 230 289 Q3 09/10 Q4 09/10 Q1 10/11 Q2 10/11 Q3 10/11 Mozambique Crop year terminated on December 5 Sugarcane crushing was of 536,000 tons and sugar production was 21% higher at 46,000 tons of sugar Solid revenue growth: + 60.5% at constant exchange rate Adjusted EBITDA: R$ 13 million, after excluding the fair value on biological effect of the sugarcane assets in R$ 1 million Capex: • Expansion of irrigation and sugarcane fields renovation • Q3 2010/11: R$1 million La Réunion Crop year terminated on December 12 at Bois Rouge and on December 15 at Le Gol Sugarcane crushing was of 1.9 million tons and production more than doubled, at 207,000 tons of sugar Revenues: + R$163 million vs. Q3 2009/10 Adjusted EBITDA: R$ 31,2 million Capex: • Investments to improve sugar quality and added- value products • Q3 2010/11: R$10 million 15
  16. 16. CerealCereal Starch Europe - Ethanol Europe
  17. 17. Starch Europe - Increase in grinding, higher sales of co-products Production and Sales Co-products Sales (‘000 t)Cereal Grinding (‘000 t) Starch & Sweeteners Sales (‘000 t) Ethanol & Alcohol Sales (‘000 m3) 638 673 693 702 696 Q3 09/10 Q4 09/10 Q1 10/11 Q2 10/11 Q3 10/11 392 413 437 424 398 Q3 09/10 Q4 09/10 Q1 10/11 Q2 10/11 Q3 10/11 236 236 239 257 253 Q3 09/10 Q4 09/10 Q1 10/11 Q2 10/11 Q3 10/11 42 45 45 46 42 Q3 09/10 Q4 09/10 Q1 10/11 Q2 10/11 Q3 10/11 17 Cereal grinding: 696,000 tons (+ 9.1% year-on-year) • Market demand partially offsetting seasonality Sales • Starch and Sweeteners: 90.4% +1.4% vs. Q3 2009/10 • Alcohol & Ethanol: 9.6% - 1.1% vs. Q3 2009/10 • Co-products + 7.2% vs. Q3 2009/10
  18. 18. 612 593 (94) +14 +61 Key Figures In R$ Million Q3 2010/11 Q3 2009/10 Change Reported Change Constant Currency Revenues 593 612 - 3.2% + 14.4% Gross Profit 134 177 - 24.5% - 7.8% Gross Margin 22.6% 29.0% EBITDA 67 78 - 14.3% - 0.4% EBITDA Margin 11.3% 12.8% Adjusted EBITDA 49 83 - 40.5% - 30.7% Adjusted EBITDA Margin 8.3% 13.5% EBIT 39 45 - 13.0% + 0.5% EBIT Margin 6.5% 7.3% Adjusted EBIT 21 49 - 57.3% - 50.5% Adjusted EBIT Margin 3.5% 8.0% Starch Europe – Profitability impacted by currency and higher raw material costs Financials Revenues In R$ MM Starch and Sweetners 58% Alcohol and Ethanol 10% Co- products 26% Others 6% Q3 2009/10 Currency Volume Price & Mix Q3 2010/11 Adjusted EBIT Margin 3.5% 8.0% Capex 45 (8) n/a 18 Revenues: + 14.4% at constant currency: + 7.6% in prices and + 6.8% in volumes Gross Profit reflecting increased cost of cereal purchased and energy • Gross margins expected to improve in fiscal Q4 as new sales contracts reflect higher costs Adjusted EBITDA: R$49 million Capex: • Equipment purchases for the Selby grain alcohol plant (start-up in 2012) • Q3 2010/11: R$45 million
  19. 19. 193 143 (29) (39) +18 Ethanol Europe: Revenues impacted by currency and temporary closure of Lillebonne Financials Key Figures In R$ Million Q3 2010/11 Q3 2009/10 Change Reported Change Constant Currency Revenues 143 193 - 25.8% - 12.8% Gross Profit 3 24 - 86.3% - 83.9% Gross Margin 2.3% 12.5% EBITDA 12 19 - 40.2% - 29.7% EBITDA Margin 8.1% 10.0% Adjusted EBITDA 12 19 - 40.2% - 29.7% Adjusted EBITDA Margin 8.1% 10.0% Capex 4 14 - 71.4% Revenues In R$ MM Q3 2009/10 Currency Volume Price & Mix Q3 2010/11 19 Ethanol production: 53,000 m³ Ethanol sales*: 104,000 m³ • - 14.7 % vs. Q3 2009/10 • Maintenance shutdown at Lillebonne (3 weeks) Revenues: - 12.8% at constant currency • Price increases offset by lower volumes EBITDA: R$12 million • Lower production • Higher energy costs Capex: • Gluten extraction: start-up in 2012. First diversification of Lillebonne’s production mix • Q3 2010/11: R$4 million * Includes sales of ethanol produced by Tereos
  20. 20. Outlook and Summary
  21. 21. The starch market in Brazil represents 1.8 million tons and is growing strongly Our project: a plant based in corn, to produce starch, glucose syrup and derivatives Key points of Tereos Internacional: • Guarani’s customers base in Brazil Tereos Internacional Investment on the Starch Sector in Brazil 21 • Guarani’s customers base in Brazil • Guarani’s distribution network in Brazil • Guarani’s industrial platform • The diversified and innovative Syral’s product portfolio • Close relations between Syral and food & nonfood multinationals, built via R&D in Europe
  22. 22. Good performance in Q3, with net income of R$143 million and Adjusted EBITDA of R$260 million • Excellent results for sugarcane activities in all regions • And despite a still difficult environment for the cereal segment Positive outlook based on solid fundamentals for sweeteners and ethanol • Global stocks remain low for sugar and ethanol • Improvement in commercial conditions in the European starch and sweeteners market, with the signing of contracts for Q4 Tereos Internacional – Conclusion 22 sweeteners market, with the signing of contracts for Q4 Tereos Internacional well positioned in a favorable environment • Tereos Indian Ocean to continue consolidation process of Quartier Français, in La Réunion • Guarani will benefit from its strong sugar position and its partnership with Petrobras Biocombustível • Tereos International will capitalize on the experience of Syral to enter a market with strong growth: the starch in Brazil
  23. 23. 23

×