20110523 ti conf_call_presentation_q4_engl_v2

Tereos InternacionalFourth Quarter and Full Year 2010/11 Results

São Paulo - May 24, 2011

Highlights

Q4 and FY 2010/11 Financial Results

Operating Segment Review

Outlook and Summary

3

* Adjusted EBITDA: EBITDA excluding items from discontinued operations, accounting effect of adjustments in the fair value of the financial instruments

(including one-off accounting results for the trading derivatives booked in other operating item) and of the biological assets

Revenues : R$1.5 billion

• Year-over-Year: + 24.2% + 25.8% at constant currency

Adjusted EBITDA*: R$205 MM


Net Profit before Taxes: R$139 MM

• 3.4x year-over-year

Cereal: positive impact of higher starch and ethanol prices resulting from negotiations of new contracts and higher ethanol volumes at the Lillebonne plant

Sugarcane: benefit from organic growth driven by capacity investments, acquisitions and high sugar and ethanol prices

Q4 2010/11 - Financial Highlights Strong revenue and operating performance

Q4 2010/11 - Market Fundamentals

4

Sugar: strong fundamentals still in place

Low inventory levels

Reduced supplies from Brazil, China and Australia

Sugar prices: peaked in early February 2011

• Prices down to 21/22 cents

Starch: continued strong demand for starch and derivative products in Europe

All starch product categories positively affected; high demand from paper, chemical and food industries

Contract terms modified to enable producers to adjust selling prices

Wheat and corn prices still high

Ethanol: favorable environment

Brazil: maximized allocation of sugarcane to sugar production versus ethanol and strong demand despite increase in prices Sharp rise in prices and tight inventories

New regulation being discussed: expected to improve credit availability for storage and production expansion

March 2010 – DVO’s is accredited for its cereal premium alcohol

April 2010 – Partnership with Petrobras Biocombustivel with a capital increase of R$1.6 billion

May 2010 – Mandu’s acquisition (3,5 million tons): R$345 million

May 2010 – Inauguration of Tanabi sugar factory

May 2010 – Inauguration of Andrade cogeneration facility (joint venture with GDF Suez)

June 2010 – Refinancing of €450 million for the Tereos EU

August 2010 – Conclusion of an ethanol commercialization agreement with BR for 2.2 million m3 over 4 years

August 2010 – Launch of the Selby distillery project in the UK for the premium alcohols sector

November 2010 – Launch of the gluten project in BENP Lillebonne

5

Main Events 2010/11Sugarcane and Starch

February – Announcement of the Brazilian starch project of R$230 MM

March 2011 – Guarani: US$560 million debt refinancing

March 2011 – R$764 million new BNDES financing

March 2011 – Launch of R$767 million investment plan in expansion of crushing capacity and cogeneration

6

Main Events 2010/11Sugarcane and Starch

7

SUGARCANE BRAZIL

March 2011 - Announcement of a R$767 million investment plan for Guarani

• Expansion of crushing capacity and cogeneration

• Petrobras equity contribution :

- R$195 million for the first phase already approved

- Stake in Guarani capital risen to 31.4%

BNDES long term funding support: a R$764 million financial package

• Maturity: 11 years

• Attractive rates

Guarani debt refinancing: debt structure lengthened and simplified through new syndicated loan

• US$560 million

Q4 2010/11 – Quarter Highlights

8

Full Year 2010/11 - Financial Highlights

Revenues : R$5.7 billion


Adjusted EBITDA*: R$850 MM


Net Profit before Taxes: R$225 MM

• Group interest in net profit after tax: R$188 million

Cereal: Surge in raw material and energy prices, partially offset by new contracts negotiations since 2H 2010/11

Sugarcane: Significant growth fueled by capacity investments, acquisitions and strong market conditions

* Adjusted EBITDA: EBITDA excluding items from discontinued operations, accounting effect of adjustments in the fair value of the financial instruments

(including one-off accounting results for the trading derivatives booked in other operating item) and of the biological assets

•Dividend: R$44.6 MM

Q4 and FY 2010/11 Financial Results

176 213

560

751

97

124390

431

Q4 2009/10 Q4 2010/11

Brazil

Indian Ocean

Starch Europe

Ethanol Europe

Total Holding

Q4 2009/10 Currency Volume Price & Mix Q4 2010/11

Q4 2010/11 - RevenuesDouble-digit Growth in Both Cereal and Sugarcane

Sugarcane• Revenues: R$555 MM + 14.1% vs Q4 2009/10 + 15.7% at constant currency

• Brazil: + 10.4% as reportedEthanol sales: + 37.2% in volume (+ 8.2% price increase)

Cereal• Revenues: R$964 MM + 30.9% vs Q4 2009/10 + 32.3% at constant currency

• Starch Europe: + 34.7% at constant exchange ratePrice increase: + 26.9% vs. Q4 2009/10

• Ethanol Europe: + 24.5% at constant exchange ratePrice increase: + 12.6% vs. Q4 2009/10

1,519

+ 24.2%

1,223

1,519

1,223

10

In R$ MM

- 15

+ 102

+ 209

752 678

2 701 2 512

239 540

1 3191 956

FY 2009/10 FY 2010/11

Brazil

Indian Ocean

Starch Europe

Ethanol Europe

Total Holding

Full Year 2010/11 - RevenuesSugarcane Operations Benefit from Strong Volume and Price Gains

5,688+ 13.5%

5,011

2

11

Sugarcane• Revenues: R$2.5 billion + 60.2% vs FY 2009/10 + 63.9% at constant currency

• Brazil: + 48.3% as reported Sugar sales: + 32.8% in volume Ethanol sales: + 26.4% in volume

• Indian Ocean: + 165.1% at constant exchange rate. Growth resulting from GQF acquisition in La Réunion

Cereal• Revenues: R$3.2 billion - 7.6% vs FY 2009/10 + 6.6% at constant currency

• Starch Europe: + 7.3% at constant exchange rate

• Ethanol Europe: + 4.1% at constant exchange rate

In R$ MM

- 496

+ 681

+ 493

24 26

78 72

8 37

96

132

Q4 2009/10 Q4 2010/11-5

In R$ MM

Adjusted EBITDA EBITDAIn R$ MM

206

263

-5

Q4 2010/11 - Adjusted EBITDA and EBITDAPrice increases for Starch and Ethanol in Europe, and Ethanol in Brazil

+ 27.2%

12

176

205+ 16.7%

Sugarcane

• Brazil: strong ethanol sales volumes and prices

• Indian Ocean: contribution of GQF acquisition

• Positive impact of biological assets and financial instruments: R$74 million

Cereal

• Starch: new sales contracts pass through higher raw material costs to selling prices

• Ethanol: increase in volumes and prices

• Negative impact of financial instruments: R$16.2 million

81 51

391289

24

108

305 381

FY 2009/10 FY 2010/11-14

In R$ MM

Adjusted EBITDA EBITDAIn R$ MM

802816

Full Year 2010/11 - Adjusted EBITDA and EBITDAIncreased Sugarcane Production Capacity and Higher Sugar and Ethanol Prices

Sugarcane

• Favorable market conditions and greater production capacity in Brazil, La Réunion and Mozambique

Cereal

• Starch: impact of higher costs of purchased cereal and energy throughout the year

• Ethanol: negative effect of barley experiments and maintenance shutdown at Lillebonne

+ 1.8%

-14

13

771

850+ 10.3%

Adjusted

EBITD A

Adjustements EBITD A Depreciation &

Amortization

Acquisition

Impact

Operating

Income

Net Financial

Expenses

Net Income

Be fore Tax

Income Tax Net Income Minority

Interest

Net Income

Group Share

14

Q4 2010/11 - From Adjusted EBITDA to Net Income

Fair value of biological assets: + R$53 MM

Fair value of financial instruments: + R$5 MM In R$ MM

205

+ 58 263

- 92

+ 1 172

139

- 32

- 33

106

- 25

81

AdjustedEBITD A

Adjustements EBITD A Depreciation&

Amortization

AcquisitionImpact

OperatingIncome

Net FinancialExpenses

Net IncomeBe fore Tax

Income Tax Net Income Shares ofProfit in

Associates

MinorityInterest

Net IncomeGroup Share

15

Full Year 2010/11 - From Adjusted EBITDA to Net Income

Fair value of biological assets: + R$40 MM

Fair value of financial instruments: - R$71 MM

Non recurring: - R$3 MM

In R$ MM850

- 34

816

- 508

+ 73 380

221

- 159- 29

192

- 8

188

Accounting impact of the difference between the price paid for Quartier Français and its equity value

+ 4

Full Year 2010/11 - Net Result

16

Net Result: 431

Net Result: 196

In R$ MM

FY 2010/11: Negative impact of income tax compared to positive impact in 2009/10

DebtTotal Net Debt: R$143 Million Decrease vs March 31, 2010

Net Debt: R$2,150 million - 16.3% vs. December 2010

Net Debt / Adjusted EBITDA: 2.5x vs. 3x at March 31, 2010

Gross Debt

Breakdown by currency Debt

In R$ MillionMarch 31, 2011 March 31, 2010 Change

Current 1,684 1,170 43.9%

Non-current 1,134 1,111 2.1%

Amortized cost (15) (5) -

Total Gross Debt 2,803 2,276 23.2%

In € 1,364 1,295 5.3%

In USD 763 269 183.6%

In R$ 637 620 2.7%

Other currencies 54 97 - 44.3%

Cash and cash Equivalent (633) (501) 26.3%

Total Net Debt 2,170 1,775 22.3%

Related Parties Net Debt (20) 518 - 103.9%

Total Net Debt + Related Parties 2,150 2,293 - 6.2%

17

Euro

48%

US Dollar

27%

Real

23%

Others

2%

Operating Segment Review

Sugarcane

Brazil - Indian Ocean

Sugarcane - Production and SalesSignificant Year-over-Year Volume Growth

Ethanol Sales (‘000 m³) Energy Sales (‘000 MWh)Sugarcane Crushing (MM t) Sugar Sales (‘000 t)

20

2010/11 production highlights

• Crop year 2010/11: 19.7 million tons + 43% y-o-y

• Product Mix: 58% sugar and 42% ethanol

• Sugar production: 1,556 thousand tons + 63% y-o-y

• Ethanol production: 692,000 m³ + 44% y-o-y

• Cogeneration: 287 GWh/year + 144% y-o-y

238 213

488424

233

Q4

09/1

0

Q1

10/1

1

Q2

10/1

1

Q3

10/1

1

Q4

10/1

1

12099

179164 165

Q4

09/1

0

Q1

10/1

1

Q2

10/1

1

Q3

10/1

1

Q4

10/1

1

7

42

113

81

51

Q4

09/1

0

Q1

10/1

1

Q2

10/1

1

Q3

10/1

1

Q4

10/1

1

0.1

7.8 7.8

4.0

Q4

09/1

0

Q1

10/1

1

Q2

10/1

1

Q3

10/1

1

Q4

10/1

1

Q4 2009/10 Price & Mix Volume Price & Mix Volume Others * Q4 2010/11

SugarEthanol

431390

Sugarcane Brazil - Q4 FinancialsBenefitting from solid Ethanol volume and prices increases

* includes Cogeneration, Agricultural Products and Hedging

Key Figures

In R$ Million

Q4

2010/11

Q4

2009/10

Change

Reported

Revenues 431 390 + 10.4%

Gross Profit 127 73 + 74.3%

Gross Margin 29.4% 18.6%

EBITDA 132 96 + 37.8%

EBITDA Margin 30.7% 24.6%

Adjusted EBITDA 79 66 + 19.9%

Adjusted EBITDA Margin 18.3% 16.9%

EBIT 95 56 + 68.2%

EBIT Margin 22.0% 14.4%

Adjusted EBIT 41 26 + 58.4%

Adjusted EBIT Margin 9.6% 6.7%

Capex 205 174 + 17.8%

Gross Profit: R$127 million

• Positive impact of fair value of biological assets:

+ R$32.5 million vs. - R$0.5 million in Q4 2009/10

Adjusted EBITDA: R$80 million

• Fair value of financial instruments:

+ R$20.8 million vs. + R$69.8 million in Q4 2009/10

• R$39.1 million of non recurring expenses in

Q4 2009/10

Capex: R$205 million

Sugar: 55.7% of total revenue

• Sales volume: - 2.4% vs. Q4 2009/10

• Price (R$/ton): + 1% vs. Q4 2009/10

Ethanol: 44.3% of total revenue

• Sales volume: + 37.2% vs. Q4 2009/10

• Price (R$/m³): + 8.2% vs. Q4 2009/10

In R$ MM

Revenues

21

- 7 - 6

+ 10

+ 52

- 8

FY 2009/10 Price & Mix Volume Price & Mix Volume Others * FY 2010/11

Sugar

Ethanol

1,956

1,319

Sugarcane Brazil - Full Year FinancialsStrong revenue growth due to favorable market conditions and increased production capacity

Key Figures

In R$ Million

FY

2010/11

FY

2009/10

Change

Reported

Revenues 1,956 1,319 + 48.3%

Gross Profit 456 295 + 54.5%


EBITDA 381 305 + 24.8%


Adjusted EBITDA 428 281 + 52.3%


EBIT 95 107 - 10.9%


Adjusted EBIT 142 83 + 72.4%


Capex 378 242 + 56.2%

In R$ MM

Revenues

22 * includes Cogeneration, Agricultural Products and Hedging

+ 58

+ 307+ 58 + 124

+ 91

Sugar: 62.0% of total revenue

• Sales volume: + 32.8% vs. 2009/10

• Price (R$/ton): + 9.4% vs. 2009/10

Ethanol: 29.7% of total revenue

• Sales volume: + 26.4% vs. 2009/10

• Price (R$/m³): + 15.1% vs. 2009/10

• Anhydrous: 33.5% of total ethanolvs. 25.2% in 2009/10

Gross Margin: + R$161 million vs. FY 2009/10

• Perimeter effect of R$94.6 million

• Fair value of biological assets: + R$24 million

Capex: R$378 million

• Cruz Alta and Severínia: R$140 million;

São José: R$80 million; Tanabi: R$59 million;

Andrade: R$38 million; Mandu: R$43 million and

Vertente (50%): R$18 million

Mozambique

Sugarcane crushing: 536,000 tons

Sugar production: 22.4% higher at 46,400 tons of sugar

Revenues

• Q4 2010/11: R$7.3 million

• FY 2010/11: R$50.7 million

Adjusted EBITDA

• Q4 2010/11: - R$5 million (Excluding fair value on biological

assets of R$20.6 million)

• FY 2010/11: R$2.8 million (Excluding fair value on biological

assets of R$15.8 million)

Capex

• FY 2010/11: R$28 million

• Irrigation and sugarcane fields renovation

La Réunion

Sugarcane crushing: 1.9 million tons

More than doubled production at 52,000 tons of sugar

Revenues

• Q4 2010/11: R$117 million (+ R$19 million vs. Q4 2009/10)

• FY 2010/11: R$489 million (+ R$290 million vs. FY 2009/10)

Adjusted EBITDA

• Q4 2010/11: R$21.5 million

• FY 2010/11: R$89.8 million

Capex

• FY 2010/11: R$73 million (+ R$66 million vs. FY 2009/10)

Sugarcane Indian Ocean - Production - Q4 and Full Year Financials Strong results

Key Figures

In R$ Million

Q4

2010/11

Q4

2009/10

FY

2010/11

FY

2009/10

Revenues 124 97 540 239

Gross Profit 54 (5) 80 (44)

Gross Margin 43.7% (5.7)% 14.8% (18.6)%

EBITDA 37 8 108 24

EBITDA Margin 29.8% 8.5% 20.1% 10.1%

Adjusted EBITDA 16 8 93 13

Adjusted EBITDA Margin 13.2% 8.2% 17.2% 5.6%

Capex 30 5 101 33

La Réunion

Sugarcane Crushing (’000 t)

Mozambique

Sugarcane Crushing (‘000 t)

23

1,003

874

Q4

09/1

0

Q1

10/1

1

Q2

10/1

1

Q3

10/1

1

Q4

10/1

1

230

289

17

Q4

09/1

0

Q1

10/1

1

Q2

10/1

1

Q3

10/1

1

Q4

10/1

1

Cereal

Starch Europe - Ethanol Europe

Starch Europe - Production and SalesStable Volumes

Co-products Sales (‘000 t)Cereal Grinding (‘000 t) Starch & Sweeteners Sales (‘000 t) Ethanol & Alcohol Sales (‘000 m3)

Cereal grinding: 696,000 tons + 3.4% year-on-year

• Higher use of corn capacities

Sales Volumes

• Starch and Sweeteners: - 1.0% vs. Q4 2009/10

• Alcohol & Ethanol: - 1.3% vs. Q4 2009/10

• Co-products + 9.4% vs. Q4 2009/10

25

673 693 702 696 696

Q4

09/1

0

Q1

10/1

1

Q2

10/1

1

Q3

10/1

1

Q4

10/1

1

413437

424398 409

Q4

09/1

0

Q1

10/1

1

Q2

10/1

1

Q3

10/1

1

Q4

10/1

1

45 45 46

4244

Q4

09/1

0

Q1

10/1

1

Q2

10/1

1

Q3

10/1

1

Q4

10/1

1

236 239 257 253 258

3961

Q4

09/1

0

Q1

10/1

1

Q2

10/1

1

Q3

10/1

1

Q4

10/1

1

SYRAL BENP/DVO

Starch Europe - Q4 FinancialsVolume and price recovery drives increased profitability

Revenues In R$ MM


751

560

26

Starch and

Sweeteners

61%

Alcohol and

Ethanol

10%

Co-products

24%

Others

5%

Key Figures

In R$ Million

Q4

2010/11

Q4

2009/10

Change

Reported

Change

Constant

Currency

Revenues 751 560 + 34.1% + 34.7%

Gross Profit 147 48 + 207.6% + 125.1%


EBITDA 72 78 - 7.4% - 6.8%


Adjusted EBITDA 88 78 + 13.9% + 14.4%


EBIT 41 41 0.0% - 2.4%


Adjusted EBIT 57 41 + 40.4% + 36.4%


Capex 39 15 + 160.0%

Revenues: + 34.7% at constant currency• + 25.9% in prices and mix

• + 8.6% in volumes

Gross Profit: R$147 million• Strong increase due to new sales contracts passing

through higher costs of purchased cereal and energy

Adjusted EBITDA: R$88 million

Capex: R$39 million

• Optimization of production lines

• Equipment purchases for the Selby grain

alcohol plant (start-up in 2012)

- 2

+ 48

+ 145

Starch Europe - Full Year FinancialsHigher starch contract prices result in better H2

Key Figures

In R$ Million

FY

2010/11

FY

2009/10

Change

Reported

Change

Constant

Currency

Revenues 2,512 2,701 - 7.0% + 7.3%

Gross Profit 581 651 - 10.8% + 4.3%


EBITDA 289 391 - 26.0% - 14.8%


Adjusted EBITDA 292 395 - 26.0% - 14.8%


EBIT 170 248 - 31.5% - 21.2%


Adjusted EBIT 173 252 - 31.5% - 21.2%


Capex 124 122 + 1.6%

Revenues In R$ MM

Revenues: + 7.3% at constant currency• Increase in sales price and change in mix product

Improved Gross margin resulting from new contracts enabling pass-through of higher costs

FY 2009/10 Currency Volume Price & Mix FY 2010/11

2,5122,701

27

Starch and

Sweeteners

60%

Alcohol and

Ethanol

10%

Co-products

25%

Others

5%

- 360

+ 50+ 121

Ethanol Europe - Q4 FinancialsIncreased Revenues and EBITDA

Key Figures

In R$ Million

Q4

2010/11

Q4

2009/10

Change

Reported

Change

Constant

Currency

Revenues 213 176 + 20.6% + 24.5%

Gross Profit 7 13 - 49.0% - 51.1%


EBITDA 26 24 + 7.0% + 13.8%


Adjusted EBITDA 26 24 + 7.0% + 13.8%


Capex 10 9 + 11.1%

Ethanol sales*: 135,000 m³

• +23.5% vs. Q4 2009/10

Revenues: + 24.5% at constant currency

• Price and volumes increase

Gross Profit: R$7 million

• R$25.7 million of revenues to reintegrate: co-products

currently sold by Tereos Syral and formerly by Tereos

BENP

EBITDA: R$26 million

• + 13.8% at constant currency

Capex: R$10 million

• Gluten extraction (start-up in 2012): Tereos BENP’s first

diversified production

* Includes sales of ethanol produced by Tereos

Revenues In R$ MM


213

176

28

- 5

+ 8

+ 34

Ethanol Europe - Full Year FinancialsRevenue impacted by maintenance closure of Lillebonne and technical difficulties in H1

Key Figures

In R$ Million

FY

2010/11

FY

2009/10

Change

Reported

Change

Constant

Currency

Revenues 678 752 - 9.7% + 4.1%

Gross Profit 28 86 - 66.7% - 61.6%


EBITDA 51 81 - 37.1% - 27.4%


Adjusted EBITDA 51 81 - 37.1% - 27.4%


Capex 28 60 - 53.3%

Ethanol production at BENP Lillebonne impacted by maintenance shutdown

Ethanol: record sales and price increase in Q4 2010/11

* Includes sales of ethanol produced by Tereos

Revenues In R$ MM

678752

29

- 100 - 36

+ 62

Revenues: + 4.1% at constant currency

Gross profit: impacted by energy and related costs

Outlook and Summary

31

Tereos Internacional - Conclusion

Solid results in Q4 for both our major activities: sugarcane and cereal operations

FY 2010/11

• Adjusted EBITDA increased to R$850 million + 10 % vs 2009/10

• Sugarcane: strong results across all geographies

• Cereal: significant swing in profitability in Q4 as new contracts reflected higher raw materials costs

Favorable market dynamics

• Sugar and Ethanol: low worldwide inventory levels

• Starch: strong market demand

20110523 ti conf_call_presentation_q4_engl_v2

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