2. Key initiatives and major developments in FY 2013/14
Progress in Operational performance
Brazil: Already reaping the benefits of the multi-year investment and efficiency program (Guarani2016):
Agriculture: +8% in volumes at 19.7 million tonnes (full consolidation) driven by strong yields (92 t/ha or
+10% above the average in the Center South region)
Co-generation: +38% in energy sales to 711 GWh, due to the ramp up of cogeneration, particularly at
São Jose and Mandu mills
Cereals Europe: ”Performance 2015 “ cost & efficiency program progressing
Major headways in International development and product portfolio diversification
Cereals Europe: Lillebonne at normalized utilization rates with more diversified mix of products
(protein/sweeteners)
2
Cereals Brazil: Sweeteners sales ramping up at Palmital corn-based starch facility and client portfolio
developing
Cereals Asia: Dongguan construction and Tieling improvement and diversification plan in China advancing.
Establishing presence in Indonesia with closing of 50% acquisition of Redwood on May 28th, 2014
Strengthening of financial situation
Capital injection from PBio at Guarani in October 2013: R$225 million (TI at 60.4% stake)
Refinancing:
Guarani: improvement in debt maturity profile with close to USD 300 million of refinancing in the last 12
months, including USD190 million of export notes in October 2013 (duration of 5 years at lower rates)
Deleverage process under way as multi-year investment program is largely completed: net
debt/EBITDA ratio down to 3.7x in March 2014 vs. 4.2x in March 2013
3. Sugar:
Since January’s low, raw sugar prices have increased 21% to 17.8
USD cents/lb in March 31st, mainly on the back of the severe
drought that affected sugarcane fields in Center-South of Brazil.
Since then prices hovering around 18.0-18.5 USD cents/lb
BRL/USD devaluation during the quarter (-5%) improved Brazilian
producers’ remuneration
Starch:
Tensions in Ukraine pushed Matif cereal prices up in Feb/Mar
Q4 2013/14 Market Highlights
14
15
16
17
18
19
20
21
380
410
440
470
500
530
560
590
Apr-13 Jul-13 Oct-13 Jan-14
LIFFE#5 NY#11
US$/MT USD Cts/lb
230
250
270 €/MT
Market demand for both starch and liquid sweeteners slightly better
last quarter but competition in Europe remains fierce
High volatility of cereal prices maintained margins under pressure
during the period
Ethanol:
In Brazil, anhydrous and hydrous ethanol prices increased 10%
and 8% in the quarter on tighter stock as the Center-South region
entered into the intercrop period. Concerns over the 2014/15
crop also contributed to sustain prices
In Europe, FOB Rotterdam prices rebounded 9% during March
from EUR460/m3 to EUR502/m3, on increasing US ethanol
prices, higher feedstock costs and stronger demand
3 Source: Bloomberg
150
170
190
210
230
Apr-13 Jul-13 Oct-13 Jan-14
Corn MATIF Wheat MATIF
400
450
500
550
600
650
700
700
900
1100
1300
1500
1700
1900
Apr-13 Jul-13 Oct-13 Jan-14
Brazil ESALQ Europe Rotterdam
R$/m³ €/m³
4. 941
1.063
1.957
2.115
2.008
2.217
7,402
Net Revenues Evolution
5,688
5,011
6,876
R$ MM
+10%
+13%
Y-o-Y growth8,339
752 678 779 1.056 848
2.701
2.511
3.156
3.396
4.211
239 540
826
941
1.319
1.957
2009/10 2010/11 2011/12 2012/13(1) 2013/14(1)
Alcohol & Ethanol Europe Starch & Sweeteners Africa/Indian Ocean Brazil
Note: (1) Figures are in accordance with IFRS 11 (JV contribution) and Group's new segmentation
4
+24%
-20%
5. 281 428
424
373
518
959
850
786
Adjusted EBITDA Evolution
771
R$ MM
+39%
Y-o-Y growth962
81 51 94
28
75
395
292
302
205
193
13
93
158
190
184
373
-14 -19 -9 -9
2009/10 2010/11 2011/12 2012/13(1) 2013/14(1)
Alcohol & Ethanol Europe Starch & Sweeteners Africa/Indian Ocean Brazil Other
5
-3%
-6%
+173%
Note: (1) Figures are in accordance with IFRS 11 (JV contribution) and Group's new segmentation
6. 0 01.056
3.396 4.211
941
1.063
2.008
2.217 Brazil
Africa/Indian Ocean
Starch &
Sweeteners
Alcohol & Ethanol
Europe
Holding
Revenues
Better volumes and positive FX effect supporting revenues growth
Net Revenues (R$ MM)
7,402
8,339
7402
8339
+874 +227
(131) (32)
0 01.056 848
2012/13 2013/14
Holding
6
Revenue growth supported by:
Higher sales volumes for all segments, except for A&E Europe, with particularly strong growth in the
year in Brazil ethanol volumes (+18%). Ethanol trading sales for Tereos Group are no longer
consolidated in this segment since October 2013
Better ethanol prices in Brazil and positive mix effect with increased volumes of protein in S&S
Positive currency translation effect due to Real depreciation vs. Euro
But partially offset by:
Negative year-on-year price evolution in sugar, as well as in S&S and ethanol in Europe (following
declining cereal prices and weak demand in EU)
2012/13 Currency Volume Price & Mix Others 2013/14
7. Net Revenues Evolution by Product
March 2013 – 12 Months March 2014 – 12 Months
Sugar
24%
Starch &
Co-products
Alcohol &
Ethanol
20%
Energy
2%
Others
11%
Sugar
22%
Starch &
SweetenersCo-products
Alcohol &
Ethanol
18%
Energy
2%
Others
10%
7
Well-diversified portfolio with relatively stable breakdown
Sugar and Sweeteners remain the major source of revenues for Tereos Internacional
Alcohol & Ethanol remains as the second major activity backed by increased volumes & prices in Brazil
Co-products revenues had a higher contribution in 2013/14 mainly on the back of positive mix effect with
the diversification of production at Lillebonne and the development of protein sales
Energy sales increasing due to the higher co-generation in Brazil
Starch &
Sweeteners
31%
Co-products
12%
Sweeteners
32%
Co-products
16%
8. 786
962
+146
(5) (12)
+48
(0)
28 75
205
193
190 184
373
518
Brazil
Africa/Indian
Ocean
Starch &
Sweeteners
Alcohol & Ethanol
Europe
Holding
Adjusted EBITDA
Sugarcane Brazil and improvement in A&E Europe setting the tone for higher profitability
Adjusted EBITDA (R$ MM)
786
962
2012/13 Brazil Africa/IO S&S A&E
Europe
Holding 2013/14-9 -9
28 75
2012/13 2013/14
8
Adjusted EBITDA up year-on-year as a consequence of:
Cost dilution in Sugarcane Brazil on higher volumes crushed and benefits from the efficiency plan
Positive contribution of A&E Europe on normalization of production and lower input costs, due
notably to ramp up of protein volumes and improved operational performance, compensating for
the drop in ethanol prices
Positive Forex impact on steady Indian Ocean performance
But partially offset by:
Tough market conditions in Europe allowing only for a partial pass-through of costs to clients
Lower production in Mozambique
Margin 11.5%Margin 10.6%
9. 43
514
16
711
Q4
12/13
FY
12/13
Q4
13/14
FY
13/14
143
477
208
563
Q4
12/13
FY
12/13
Q4
13/14
FY
13/14
363
1.357
374
1.482
Q4
12/13
FY
12/13
Q4
13/14
FY
13/14
4,9
16.5
0
18.3
Q4
12/13
FY
12/13
Q4
13/14
FY
13/14
Ethanol Sales (‘000 m³)Sugarcane Crushing (MM t) Sugar Sales (‘000 t)
+9.2% YoY +18.1% YoY
Sugarcane Brazil – Production & Sales
Record Sugarcane Crushing at 19.7 million tonnes
Energy Sales (‘000 MWh)
+38.3% YoY
Crushing
+10.6% YoY
9
Crushing
Higher crushing in 2013/14: 19.7 million tonnes or +8% y-o-y (full consolidation) and 18.3 million tonnes
or +11% y-o-y (without Vertente, on equity consolidation)
Better-than-expected agricultural yields at 92 t/ha vs. 84 t/ha in 2012/13
Improvement in production
Overall production up 10% to 2.5 Mt (expressed in TRS)
Mix: 63% sugar, 37% ethanol vs. 64% / 36% last year
Sugar: 1.5 Mt +9% YoY
Ethanol: 535 k m³ +13% YoY
Progress on cogeneration
Energy sales (including trading) up 38% to 711 GWh, due to the ramp up of cogeneration, particularly at
São Jose and Mandu mills
10. 2008 2217
(59)
+121 +73 +97
(23)
2012/13 Price & Volume Price & Volume Others 2013/14
Sugarcane Brazil – Financials
Positive volume impact and ethanol price effect together with higher cogeneration revenues
Net Revenues (R$ MM)
Sugar Ethanol
Key Figures
In R$ Million
2013/14 2012/13 Change
Revenues 2,217 2,008 +10%
Gross Profit 429 304 +41%
Margin 19.4% 15.1%
EBIT 132 35 +275%
Margin 5.9% 1.7%
Adjusted EBITDA 518 373 +39%
2012/13 Price &
Mix
Volume Price &
Mix
Volume Others 2013/14
* includes Cogeneration, Agricultural Products, Hedging and Ethanol Resale
10
(1) Tereos Internacional allocates tilling expenses as cost.
If tilling expenses were allocated as investment, Adjusted
EBITDA for fiscal year 2013/14 would have reached
R$623 million.
Sugar: 58% of total net revenues
Volumes increased 9% to 1.482 million tonnes
Prices down 5% Y-o-Y at 873 R$/tonne
Ethanol: 32% of total net revenues
Volume sold up 18% to 563,000 m3
Prices up 12% Y-o-Y at 1,251 R$/m3
Cogeneration: R$101 million vs. R$80 million
Adjusted EBITDA: R$518 million, +39%
• Lower unitary costs coupled with better
ethanol prices and first benefits of Guarani
2016 program
• Adjusted EBITDA margin up nearly 5ppts
• Adjusted EBITDA Margin1 for fiscal year
2013/14 including tilling as depreciation:
28.1%
Margin 23.4% 18.5%
11. 63
290
68
286
Q4
12/13
FY
12/13
Q4
13/14
FY
13/14
6
2.566
0
2.188
Q4
12/13
FY
12/13
Q4
13/14
FY
13/14
-14.7% YoY
Sugarcane Indian Ocean/Africa – Production and Financials
Indian Ocean operations continue to deliver steady performance
Sugarcane Crushing (’000 t) Sugar sales (‘000 t)
-1.4% YoY
Key Figures
In R$ Million
2013/14 2012/13 Change
Revenues 1,063 941 +13%
Gross Profit 197 222 -11%
Margin 18.5% 23.6%
EBIT 66 84 -22%
Margin 6.2% 8.9%
Adjusted EBITDA 184 190 -3%
Margin 17.3% 20.1%
11
2013/14 Revenue Breakdown by Product Sugarcane crushing
Indian Ocean: slight reduction (-7% in sugarcane crushing
to 1.72 million tonnes)
Africa: unfavorable weather conditions and technical
issues with irrigation resulted in a 36% reduction in
sugarcane crushing to 470,000 tonnes
Revenues: +13% Y-o-Y
Positive volume and FX impact in Indian Ocean more than
offset the negative price effect for the segment and volume
drop in Mozambique
Adjusted EBITDA: -3% Y-o-Y
Positive Forex impact on steady Indian Ocean
performance did not fully compensate the drop in results
for Mozambique
Sugar Indian
Ocean 44%
Sugar Africa
8%
Trading and
others 48%
12. 129
535
79
423
Q4
12/13
FY
12/13
Q4
13/14
FY
13/14
432
1.738
451
1.772
Q4
12/13
FY
12/13
Q4
13/14
FY
13/14
764
3.151
839
3.298
Q4
12/13
FY
12/13
Q4
13/14
FY
13/14
Cereal Segment - Production and Sales
Higher Grinding on Recovery of Lillebonne Production and Palmital Ramp-up
Cereal Grinding
(‘000 t)
Starch & Sweeteners
Sales (‘000 t)
+4.7% YoY +2.0% YoY
Alcohol & Ethanol
Sales (‘000 m3)
-20.9% YoY
289
1.166
282
1.162
4T
12/13
12M
12/13
4T
13/14
12M
13/14
Co-products Sales
(‘000 t)
-0.3% YoY
Q4
12/13
FY
12/13
Q4
13/14
FY
13/14
Q4
12/13
FY
12/13
Q4
13/14
FY
13/14
Q4
12/13
FY
12/13
Q4
13/14
FY
13/14
12
Grinding in 2013/14: +5% to 3.3 million tonnes, mostly driven by better capacity utilization at Lillebonne,
investments in Marckolsheim and ramp-up of Palmital corn factory in Brazil
Starch & Sweeteners sales: +2% Slight increase in the volume of starch products sold in a
sluggish EU market with strong pressure on prices for
some segments
Alcohol & Ethanol sales: -21% Mostly end of ethanol trading sales for Tereos Group in the 2nd
half
4T
12/13
12M
12/13
4T
13/14
12M
13/14
13. 3396
4211
+567
+282
(70)
+36
Starch & Sweeteners – Financials
Revenue increase, although profitability remains pressured by cost pass-through
Net Revenues (R$ MM)
Key Figures
In R$ Million
2013/14 2012/13 Change
Revenues 4,211 3,396 +24%
Gross Profit 664 611 +9%
Margin 15.8% 18.0%
EBIT 14 75 -81%
Margin 0.3% 2.2%
Adjusted EBITDA 193 205 -6%
2012/13 Currency Volume Price & Mix Others 2013/14
13
Revenues: R$4,211 million, up 24%
Positive volume impact mainly on the back of higher protein sales
Better prices for co-products (mix effect of protein) were offset by lower prices for
starches and sweeteners
Adjusted EBITDA: R$193 million, down 6%
Tough market conditions in Europe maintained pressure on margins year-on-year
Benefit of recent investments expanding product portfolio not yet fully obtained
Adjusted EBITDA 193 205 -6%
Margin 4.6% 6.0%
14. Alcohol & Ethanol Europe – Financials
Positive performance in the 2nd half led to better results y-o-y. End of trading activity
Net Revenues (R$ MM)
Key Figures
In R$ Million
2013/14 2012/13 Change
Revenues 848 1,056 -20%
Gross Profit 69 51 +36%
Margin 8.1% 4.8%
EBIT 31 (17) -282%
Margin 3.7% (1.6%)
Adjusted EBITDA 75 28 +173%
1056
848
+161
(311) (38) (20)
Revenues: R$848 million, down 20%
Prices: -3.6% for the segment
Lower ethanol trading sales y-o-y
Adjusted EBITDA: R$75 million, up 173%
Lower input prices, due notably to ramp up of
gluten volumes and improved operational
performance, more than offsetting the lower
Rotterdam prices
14
2013/14 Revenue Breakdown by Product
Margin 8.9% 2.6%
Alcohol &
ethanol own
sales 66%
Trading of
ethanol 29%
Others 5%
2012/13 Currency Volume Price & Mix Others 2013/14
15. Capital Expenditures
Significant CAPEX reduction with the finalization of several investment programs
CAPEX (R$ MM)2013/14 CAPEX Breakdown
Starch &
Sweeteners
21%
Alcohol &
Ethanol
Europe
4%
Africa/Indian
Brazil
63%
1111
885
+24 +8
(149)
(109)
15
Brazil: R$561 million
• Combination of plantation, intercrop costs,
and multi-year investment plan in capacity
and cogeneration (Tanabi)
• 86% of the expansion program completed
Africa/Indian Ocean: R$110 million
• Primarily maintenance for the segment and
plantation in Mozambique
Starch & Sweeteners: R$182 million
• Focused on maintenance of European
facilities and finalization of 1st phase of
investments of Palmital starch facility
Alcohol & Ethanol Europe: R$31 million
• Maintenance of current operations
Africa/Indian
Ocean
12% 2012/13 Brazil Africa/IO S&S A&E
Europe
2013/14
16. Cash Flow Reconciliation & Debt Composition
Strong deleverage: 3.7x in March 2014 vs. 4.9x in December 2013
Cash Flow
In R$ Million
2013/14
Adjusted EBITDA 962
Working capital variance 288
Financial interests (197)
Others (119)
Operating Cash Flow 934
Recurring Capex (530)
Recurring Cash Flow 404
Debt
In R$ Million
March 31st,
2014
March 31st,
2013
∆
Current 1,522 1,829 -16.8%
Non-current 2,734 2,399 +14.0%
Amortized cost (23) (26)
Total Gross Debt 4,233 4,202 +0.7%
In € 1,413 1,596 -11.5%
In USD 1,890 1,688 +12.0%
In R$ 935 882 +6.0%
16
Net Debt/Adjusted EBITDA: 3.7x vs. 4.2x on March 31st, 2013 and 4.9x sequentially
Refinancing of USD190 million notes at Guarani
Working capital efforts
Currency Effect on Debt: Devaluation of the Real against Euro and USD
Growth Capex (360)
Dividends paid and
received
9
Capital increase 225
Others (78)
Free Cash Flow 200
Others (inc. Forex impact) (444)
Net Debt Variation (244)
In R$ 935 882 +6.0%
Other currencies 19 62 -69.3%
Cash and Cash Equivalent (682) (892) -23.5%
Total Net Debt 3,551 3,310 +7.3%
Related Parties Net Debt 15 13 -
Total Net Debt + Related
Parties
3,566 3,322 +7.3%
17. Sugarcane Brazil:
Crushing volumes in the next crop expected to be up again, by some 4%, to c. 20.5 million tonnes (full
consolidation basis) to further increase industrial utilization rates, in contrast to Center-South region which is
expected to crush less than last year (current estimates hovering around a 5-10% drop)
Electricity volume to further grow next year, with Tanabi coming on stream
Further unitary cost reduction expected due to the “Guarani 2016” efficiency program and higher crushing
Multi-year investment program in Brazil nearing completion to further reduce Capex level next year
Sugarcane Africa/Indian Ocean:
Sugarcane crushing in Mozambique to recover on the back of higher replanted area in irrigated fields
Cereals:
Outlook
Cereals:
Europe:
“Performance 2015”: progress to continue on the multi-year performance improvement program; economic
conditions expected to remain challenging in the EU and cereal prices to remain volatile
Major development projects completed in Europe, Capex reduced and oriented to energy saving programs/
sustaining activity
Alcohol & Ethanol segment operational performance stabilized at Lillebonne. Normalization of margins with the
end of trading sales activity for Tereos Group. Negative impact of lower ethanol price to remain
International:
Brazil: full year-consolidation of Palmital as sweeteners sales ramp up to improve the product mix, helping as
well to dilute fixed costs
China: Dongguan facility to start ramping up in the second semester
Indonesia: Operational performance improvement and product diversification plan at Redwood to be finalized,
and implementation to begin in the year
17
