Acucar Guarani Q1 09/10 earnings presentation

1. Q1 09/10 Results
August 18th, 2009

2. Disclaimer
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.
2

3. Q1 09/10 Sugar Market Overview
Growth in sugar prices as a Guarani’s Sugar Average Prices
consequence of the decrease in (R$/ton)
production by major producers, such
as India and EU 900
Sugar prices closing the quarter at the 700
highest level in three years, both in
US$ and in R$ terms
500
Increase in sugar prices also 300
supported by the increased net
Q1 07/08
Q2 07/08
Q3 07/08
Q4 07/08
Q1 08/09
Q2 08/09
Q3 08/09
Q4 08/09
Q1 09/10
position of index-funds, speculative
funds and the trading sector
3

4. Q1 09/10 Ethanol Market Overview
Increase of 25% in volume of Guarani’s Ethanol Average Prices
hydrous ethanol sold in the domestic (R$/m³)
market (Brazilian Center-south),
compared to Q1 08/09, sustained by 1000
the increased flex fuel vehicle fleet
800
Q1 09/10 ethanol prices were lower in
comparison to the previous year due to 600
high offer caused by cash
requirements of Brazilian producers
400
Q1 07/08
Q2 07/08
Q3 07/08
Q4 07/08
Q1 08/09
Q2 08/09
Q3 08/09
Q4 08/09
Q1 09/10
Exports slightly lower: 1 billion litres
(-9.4% compared to Q1 08/09) due to
reduction in US imports, but with
increase in deliveries to Japan, India
and South Korea
4

5. 9.5% Increase in Volume of Sugarcane
Crushed in Q1 09/10
Sugarcane
Increase due to own sugar cane crushed
Crushed (MM t)
• Strategy to increase plantation last
year allowed additional supply of
own sugarcane 4.5
4.1
• Third party sugarcane strategy timely
due to credit crisis 2.7
2.7
2009/10 Crushing target at 14.8 million
1.8
tons 1.4
• Brazil: 14.2 million tons Q1 08/09 Q1 09/10
• Mozambique: 0.6 million tons Own 3rd Party
5

6. Strong Increase in Refined Sugar
Production and Solid Ethanol Production
Sugar Production Ethanol Production
(‘000 t) (‘000 m³)
278 269
37 33 151
129
90
145
122
107
146
96
22 29
Q1 08/09 Q1 09/10
Q1 08/09 Q1 09/10
Refined Crystal VHP
Anhydrous Hydrous
Increased refined sugar production to address industrial markets and benefit from
white premium
Ethanol production increase in Q1 due to weather conditions that favored
sugarcane allocation to ethanol
Mix to shift towards sugar to benefit from high prices during the crop
6

7. 18.1% Increase in Net Revenue Driven by
Higher Sugar Prices in Q1 09/10
Growth in net revenue driven mainly by:
• Increase in average sugar prices in Reais Net Revenue
(R$ MM)
(+50.8%), reaching 703.3 R$/ton
• Increase in sugar sales by 1.7%
• Concentration of sugar sales in the 234
domestic market (67.7%) 18
198
19 66
81
Ethanol revenue down by 18.6%
151
98
Guarani’s Net Revenue breakdown was:
Q1 08/09 Q1 09/10
Sugar: 64.3%
Sugar Ethanol Others
Ethanol: 28.1%
Energy: 1.7%
Other products: 5.9%
7

8. Sharp Rise in Adjusted EBITDA:
R$49.9 Million, +185.1% over Q1 08/09
Adjusted EBITDA
(R$ MM)
100 21.3% 23,0%
21,0%
80 19,0%
Sharp increase in Adjusted EBITDA due to higher 60
17,0%
15,0%
sugar prices and controlled costs and G&A 13,0%
40
expenses 8.8%
49.9
11,0%
20 9,0%
17.5 7,0%
0 5,0%
Adjusted EBITDA Margin of 21.3% versus 8.8% in Q1 08/09 Q1 09/10
Adjusted EBITDA Adjusted EBITDA Margin
Q1 08/09
Adjusted EBITDA
Margin1
Adjusted EBITDA measured by ton of TRS sold of 40%
R$122.5 in Q1 09/10 (+194.5%) 30%
20%
10%
0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
07/08 08/09 09/10
(1) 2007/08 figures have been reclassified and changed due to law 11638/07, as compared to figures previously disclosed.
8

9. Net Profit of R$14.3 million Driven by
Strong Prices and Positive FOREX
Impact
Net Profit
(R$ MM)
Net Profit: R$ 14.3 million in Q1 09/10, compared
with a net loss of R$26.6 million in the same period of
the prior year
14
Net profit impacted mainly by:
• Strong price recovery for sugar (+50.8%)
(27)
• Net non-cash FOREX effect of R$86.0 million
Q1 08/09 Q1 09/10
9

10. Net Debt Up but Improved Indebtedness
Ratios Net Debt
per Currency1
Net debt at R$ 1.1 billion, up 6.4% over the BRL
previous quarter, due to working capital 39%
requirements Foreign
Currency
61%
Short-term debt net of cash and cash-equivalents
totaled R$ 233.5 million, representing 37% of total
Net Debt, excluding intercompany loans
(1) Includes R$112.1 million related to SHL in Mozambique
Net Debt
The increase in Guarani’s net debt is mainly due to per Term1
increased finished products inventories
Net Debt/Adjusted EBTIDA ratio at 4.1x in June, Current
37%
2009 versus 4.3x in March, 09. Excluding Non-
Current
intercompany loans, Net Debt/Adjusted EBITDA 63%
ratio stood at 2.4x
(1) Excludes intercompany loans and cash & cash equivalent
10

11. CAPEX: Focus on Sugarcane Plantation,
Cost Reduction and Efficiency Programs
Continued selectivity on CAPEX: R$52 million in
CAPEX
Q1 09/10 compared to R$91 million in Q1 08/09 (R$ MM)1
Focus on plantation CAPEX (R$30 million) to 91
ensure adequate raw material availability and 30
productivity for next crop 52
30
61
22
Selective industrial CAPEX (R$22 million) to
eliminate bottlenecks and further develop marginal Q1 08/09 Q1 09/10
capacity to lower fixed costs at São José and Tanabi PPE Planting
plants
CAPEX approved to allow sugar production in
Tanabi as from next crop
1) CAPEX does not consider maintenance.
11

12. Sugar Market Outlook: Positive Trend in
08/09 and 09/10 World Crops Raw Sugar Prices
(NY 11)
cents US$/lb cents R$/lb
18 36
Q109 Q209 Q309 Q409 Q110
33
16
cents US$/lb
cents R$/lb
30
14 27
Global sugar deficit expected to continue 12 24
supporting sugar prices 21
10
18
8 15
01-Apr-08
01-Oct-08
01-Apr-09
01-Jul-08
01-Jul-09
01-Jan-09
Brazilian position favoured by lower output of
major producers such as India, China and EU
Source: ICE
Weather driving crop yields in India (drought World Sugar Balance
caused by weak Monsoons) and in Brazil (heavy
Inventories Production Consumption
rains during winter)
Production/Consumption (MM ton)
60 180
Inventories (MM ton)
160
Strong growth in global demand, unaffected by 50
crisis 140
40
120
30 100
98/99
99/00
00/01
01/02
02/03
03/04
04/05
05/06
06/07
07/08
08/09E
09/10E
Source: LMC
12

13. Ethanol Market Outlook: Consumption
Growth Supported by Higher Sales of
Flex-Fuel Vehicles
Domestic Market
Vehicles Sales per Fuel Type
(Brazil)
Sustained demand from strong sales of flex fuel Ethanol + Flex-Fuel Gas + Diesel
vehicles 350
Q109 Q209 Q309 Q409 Q110
300
Increased hydrous ethanol consumption due to 250
'000 units
the competitive price parity to gasoline at the pump 200
150
100
Prices expected to recover beginning in Q2 09/10
50
0
Apr-08
Oct-08
Apr-09
Jul-08
Jan-09
International Market
Source: Anfavea
Increased ethanol prices in the US market due to
stronger corn, gasoline and oil prices
Increased exports to Asia and stable sales to the
European market
13

14. Outlook: Guarani Solidly Positioned to Seize
Opportunities and Benefit from a Market Upturn
Sugarcane crushed expected to reach 14.8 million tons in 2009/10 crop versus 14.4
million tons in previous crop
Production mix geared towards sugar to allow Guarani to take advantage of the upturn in
sugar prices
Increased demand for ethanol due to attractive ratio between ethanol and gasoline
prices at the pump. Positive price outlook as of second half of 09/10
Plants to take advantage of increased volumes and lower fixed costs per ton produced
Disciplined CAPEX allocation in order to ensure expected sugarcane availability and
profit from rapid pay-back programs
Continued focus on balance sheet strengthening
Positive non-cash effect in P&L of Brazilian Real appreciation vis-à-vis the US Dollar
Strong commitment and support from Tereos, Guarani’s controlling shareholder, to
seize opportunities
14

15. Thank You!
Reynaldo F. Benitez
CFO and Investor Relations Officer
Alexandre L. Menezio
Investor Relations Manager
phone: +55 (11) 3544-4900
Felipe F. Mendes e-mail: ri@aguarani.com.br
Investor Relations Analyst
website:www.acucarguarani.com.br/ir
Renato N. Zanetti Neto
Investor Relations Analyst
Leonardo T. Goes
Investor Relations Assistant