20111115 q2 201112_eng_final

Tereos InternacionalSecond Quarter 2011/12 Results

São Paulo - November 16th, 2011

Quarter and Half Highlights

Q2 2011/12 Financial Results

Operating Segment Review

Outlook and Summary

Quarter and Half Highlights

* Adjusted EBITDA/EBIT: EBITDA/EBIT excluding items from discontinued operations, accounting effect of adjustments in the

fair value of the financial instruments and of the biological assets

Strong revenues: R$1.6 billion…

• Year-on-Year: + 8.7% at constant currency

…due to:

• increased year-on-year prices across all key products categories

• higher volumes sold for the EU ethanol segment and Indian Ocean sugarcane segment

Record EBITDA: R$282 MM

• EBITDA margin of 17.1% 370 bps improvement from Q1

Adjusted EBITDA*: R$264 MM

• -7.5% Year-over-Year +28.2% Quarter-on-Quarter

Q2 2011/12 - Financial Highlights Strong quarter revenues and EBITDA demonstrating benefits of Company’s complementary

portfolio

4

* Adjusted EBITDA/EBIT: EBITDA/EBIT excluding items from discontinued operations, accounting effect of adjustments in the

fair value of the financial instruments and of the biological assets

H1 11/12 revenues: R$3.2 billion, up 24.9% at constant currency

• Year-on-year increase in prices across all key products categories

• +21.6% for Brazil and +25.6% for Starch Europe, at constant currency

Adjusted EBITDA*: R$470.8 MM, up 21.4% at constant currency

• Adjusted EBITDA margin of 14.5%

• EBITDA: R$497.1 MM, up 45.3% at constant currency

Net financial expenses: R$87.8 MM, down 17.4% at constant currency

• Loss on foreign exchange: R$6.2 million

Consolidated net result: R$65.6 MM, an increase of R$148.6 MM at constant currency

H1 2011/12 - Financial HighlightsHigher prices boosting revenues and EBITDA

5

Q2 2011/12 - Market Fundamentals

Sugar: Shortfall in Brazil supports prices

• UNICA’s new estimate for 2011/12 Center-south crop: 489 MM tons (-14.1% vs. the 1st estimate)

• Bumper crop expected in Thailand, EU and Russia

Starch: Cereal prices down driven by higher production estimates

• Average corn and wheat prices down 14% from Q1 to Q2

• USDA estimates an improvement in world wheat balance

• Wheat prices remained cheaper than corn during the quarter (average 5 EUR/ton)

Ethanol: Tight balance across main markets maintaining high prices

• Brazil: limited supply still supporting higher prices

• Europe: ethanol supply lags behind blending target

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Sugarcane:

• Guarani revised its original forecast from 18.5 MM tons to 16.2 MM tons (12.4% reduction), in line with UNICA’s forecast revision

• On time completion of R$800 million announced investment plan: start-up of ethanol distillery in São José plant and conclusion of annual planting program

Cereal:

• Selby plant and BENP project on route and expected to come on stream in the first half of 2012 calendar year

• MoU with Wilmar to process 300,000 tons of wheat in China in the first phase of the project

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Q2 2011/12 - Highlights

Q2 2011/12 Financial Results

Q2 2011/12 - RevenuesRevenues increase driven by higher prices and better product mix in starch segment

1,648+ 10.0%

1,498

In R$ MM

Sugarcane

• Revenues: R$ 698 mm -7% vs. Q2 2010/11 at constant currency

• Brazil: -18% as reported -31% volume effect and +34% price effect (ex-hedge)

• Indian Ocean: +46% at constant currency Mainly driven by volume & price increases in Mozambique

Cereal

• Revenues: R$ 949 mm +24% vs. Q2 2010/11 at constant currency

• Starch Europe: + 32% at constant currency Mainly driven by 24% increase in selling prices & mix

• Ethanol Europe: -5% at constant currency Mainly due to -15% effect of trading volume

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Q2 2010/11

Currency Volume Price & Mix

Others Q2 2011/12

1,6481,498 +16

-162

+26+270

In R$ MM

Adjusted EBITDA EBITDA

226

282

Q2 2011/12 - Adjusted EBITDA and EBITDAImpact of lower volumes in Brazil partly offset by higher prices in all segments

+ 24.4%

10

285264

- 7.5%

Sugarcane• Brazil: -42% as reported Mainly due to fixed costs diluted on lower volumes

• Indian Ocean: +50% at constant currency Positive effect of higher prices and volumes

Cereal• Starch: +31% at constant currency Mainly driven by higher selling prices

• Ethanol: 3x higher at constant currency Boosted by own sales (slightly affected by lower trading

activities)

Adjustments• Sugarcane: - R$ 5 million Fair value of biological assets and financial instruments

• Cereals: - R$ 12 million Fair value of financial instruments

In R$ MM

Cash Flow

In R$ MillionH1 2011/12

Adjusted EBITDA 471

Working capital variance (513)

Other operating (including income tax paid) (24)

Operating Cash Flow (66)

Financial interests (56)

Dividends paid and received (51)

Capex (398)

Financial investments (50)

Free Cash Flow (621)

Forex impact (300)

Acquisition & Perimeter impact (14)

Total net debt (935)

Increase in working capital due to higher

stocks in Brazil, reflecting the seasonality

of the quarter (vs. 31/03/11)

Capex & Acquisitions

• Brazil: R$234 million

• Cereals: R$139 million

• Indian Ocean: R$48 million

R$ 300 million Forex impact on total net

debt versus March 2011

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Cash Flow reflecting the rise in Working Capital and CAPEX

Net Debt / Adjusted EBITDA: 3.3x in line with 3.4x at Sept 30, 2010

(12 months Adjusted EBITDA = R$ 935.4 million)

Main reasons for the Net Debt increase:

(i) Non-cash Forex impact;

(ii) Investments; and

(iii) Working capital needs

Debt

In R$ Million

September 30, 2011

March 31, 2011

September 30, 2010

Change

Y-o-Y

Current 1,435 1,684 1,667 -13.9%

Non-current 2,138 1,134 1,236 73.0%

Amortized cost (25) (15) (16) 56.2%

Total Gross Debt 3,547 2,803 2,887 22.9%

In € 1,575 1,364 1,388 13.5%

In USD 1,671 763 757 120.7%

In R$ 258 637 703 -63.3%

Other currencies 69 54 55 25.4%

Cash and cash Equivalent (429) (633) (440) -2.5%

Total Net Debt 3,119 2,170 2,447 27.5%

Related Parties Net Debt (35) (21) (31) 9.7%

Total Net Debt + Related Parties

3,084 2,149 2,416 27.6%

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Total Net DebtR$668 million increase vs September 30, 2010

Gross Debt

Breakdown by currency

Euro

44%

US Dollar

47%

Real

7%

Others

2%

US$ denominated debt related to

sugar export contracts

Debt related to cereal

functional currency

Operating Segment Review

Sugarcane

Brazil - Indian Ocean

Sugarcane Brazil - Production and Sales

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

15

Sugarcane crushing: 7.8 million tons - 11% vs. Q2 2010/11

Sugar production: 694,000 tons - 9% vs. Q2 2010/11

• Mix: 63% sugar and 37% ethanol

Ethanol production: 252,000 m³ - 26% vs. Q2 2010/11

• Anhydrous: 38% of total ethanol vs. 33% in Q2 2010/11

Cogeneration: 105,500 MWh - 7% vs. Q2 2010/11

8,8

4,05,8

7,8

Q2

10/1

1

Q3

10/1

1

Q4

10/1

1

Q1

11/1

2

Q2

11/1

2

179164 165

140

99

Q2

10/1

1

Q3

10/1

1

Q4

10/1

1

Q1

11/1

2

Q2

11/1

2

113

81

51

84106

Q2

10/1

1

Q3

10/1

1

Q4

10/1

1

Q1

11/1

2

Q2

11/1

2

Adverse climatic conditions (drought in 2010 and frost in 2011 winter) and heavy flowering affected sugarcane yields and sugar content (TRS)

TRS : 146 kg of sugar /ton of sugarcane for Q2 2011/12 vs.156 kg/ton for Q2 2010/11

488424

233305

374

Q2

10/1

1

Q3

10/1

1

Q4

10/1

1

Q1

11/1

2

Q2

11/1

2

Sugar

Ethanol

502

613

Sugarcane Brazil – Q2 FinancialsHigher prices for sugar and ethanol partly offset lower volumes

* includes Cogeneration, Agricultural Products and Hedging

Key Figures

In R$ Million

Q2

2011/12

Q2

2010/11

Change

Reported

Revenues 502 613 -18.1%

Gross Profit 40 158 -74.4%

Gross Margin 8.1% 25.9%

EBITDA 115 139 -17.3%

EBITDA Margin 23.0% 22.7%

Adjusted EBITDA 109 188 -42.0%

Adjusted EBITDA Margin 21.8% 30.7%

Capex 95 40 +138.7%

Gross Profit: R$40 million

• Impact of fair value of biological assets:

- R$2.1 million vs. - R$21.4 million in Q2 2010/11

Adjusted EBITDA: R$109 million

• Fair value of financial instruments:

- R$8.0 million vs. + R$24.7 million in Q2 2010/11

Adjusted EBITDA Margin1 including tilling

depreciation would be 32.0%

Sugar: 68% of total revenue

• Sales volume: - 23% vs. Q2 2010/11

• Price (R$/ton): + 27% vs. Q2 2010/11 before hedging

effect

Ethanol: 23% of total revenue

• Sales volume: - 45% vs. Q2 2010/11

• Price (R$/m³): + 41% vs. Q2 2010/11

Capex: R$95 million

• Plantation: R$23 million

• Expansion and cogeneration: R$52 million

• Current investments: R$20 million

In R$ MM

Revenues

16

+ 84

- 94

+ 34

- 66- 69

(1) Tereos Internacional allocates tilling expenses as

cost. If tilling expenses were allocated as investment,

Adjusted EBITDA would have reached R$ 160

million.

Mozambique

Sugarcane crushing: 315,000 tons

• Record quarter crushing

• Quarter agricultural yields reached 77 ton/ha vs 51

ton/ha in Q2 10/11 as a result of irrigation and planting

program

Revenues: R$32 million

• 2.2x higher vs. Q2 2010/11

Adjusted EBITDA: + R$14 million

• Up R$4 million vs. Q2 2010/11

Capex: R$4.7 million

• -R$1 million vs. Q2 2010/11

La Réunion

Sugarcane crushing: 989 000 tons

Revenues: R$164 million

• + R$48 million vs. Q2 2010/11

Adjusted EBITDA: R$44.8 million

• vs. R$29.1 million in Q2 2010/11

Capex: R$10.8 million

• - R$30 million vs. Q2 2010/11

Sugarcane Indian Ocean – Production – Q2 Financials Better results and improved operations

Key Figures

In R$ Million

Q2

2011/12

Q2

2010/11

Revenues 197 131

Gross Profit 46 (52)

Gross Margin 23.6% (39.6)%

EBITDA 58 25


Adjusted EBITDA 59 39


Capex 15 47

La Réunion

Sugarcane Crushing (’000 t)

Mozambique

Sugarcane Crushing (‘000 t)

17

1.003

874

989

Q2

10/1

1

Q3

10/1

1

Q4

10/1

1

Q1

11/1

2

Q2

11/1

2

230

289

17 65

315

Q2

10/1

1

Q3

10/1

1

Q4

10/1

1

Q1

11/1

2

Q2

11/1

2

Cereal

Starch Europe - Ethanol Europe

Starch Europe - Production and SalesHigher cereal grinding and improved sales volumes of ethanol & alcohol and co-products

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

Cereal grinding: 720,000 tons + 2.6% vs. Q2 2010/11

More wheat ground: different mix of products

Lesser impact in starch and sweeteners volumes and higher impact in co-products

Sales Volumes

• Starch and Sweeteners: + stable vs. Q2 2010/11

• Alcohol & Ethanol: + 4.3% vs. Q2 2010/11

• Co-products (ex-BENP volumes): + 1.9% vs. Q2 2010/11

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702 696 696739 720

Q2

10/1

1

Q3

10/1

1

Q4

10/1

1

Q1

11/1

2

Q2

11/1

2

424398 409

440424

Q2

10/1

1

Q3

10/1

1

Q4

10/1

1

Q1

11/1

2

Q2

11/1

2

46

4244 43

48

Q2

10/1

1

Q3

10/1

1

Q4

10/1

1

Q1

11/1

2

Q2

11/1

2

257 253 258 262 262

3961 68 59

Q2

10/1

1

Q3

10/1

1

Q4

10/1

1

Q1

11/1

2

Q2

11/1

2

SYRAL BENP/DVO

Starch Europe – Q2 FinancialsSolid results driven by higher volumes and prices

Revenues* In R$ MM

767591

Starch and

Sweeteners

61.2%

Alcohol and

Ethanol

10.7%

Co-products

and others

28.1%

Key Figures

In R$ Million

Q2

2011/12

Q2

2010/11

Change

Reported

Change

Constant

Currency

Revenues* 767 591 +29.8% +27.4%

Gross Profit* 150 128 +17.2% +14.5%

Gross Margin* 19.6% 21.7%

EBITDA 87 61 +42.6% +39.8%


Adjusted EBITDA 76 56 +34.1% +31.3%


Capex 38 18 +111.7%

Revenues: +27.4% at constant currency• +24.5% in prices and mix. Cereal prices increases

mostly passed through to customers

• +3.4% in volumes

Gross Profit: R$150 million

Adjusted EBITDA: R$76 million, up R$21 million

+11 +20+145

* Excludes the R$ 27.5 million financial impact of the sales of co-

products produced by Tereos BENP and sold by Tereos Syral20

Ethanol Europe – Q2 FinancialsHigher sales volumes of own ethanol while lower trading sales

Key Figures

In R$ Million

Q2

2011/12

Q2

2010/11

Change

Reported

Change

Constant

Currency

Revenues** 182 160 +13.7% +11.7%

Gross Profit** 34 7 +5x +5x

Gross Margin** 18.7% 4.2%

EBITDA 22 7 +3x +3x


Adjusted EBITDA 22 7 +3x +3x


Capex 27 7 +4x +4x

Ethanol sales*: 105,800 m³

• Slightly lower than Q2 2010/11. Increase in production

practically offsetting a decrease in trading activities

Revenues**: R$182 million, +11.7% at constant

currency

• FX impact: +1.9%

• Volumes increase (ex-trading): +29.4%

• Prices fall: -2.5%

Improved gross margin and stable EBITDA margin as compared to Q1 2011/12

Higher production figures, on the back of better utilization ratios

Capex: R$27 million

• Mainly for gluten project at BENP

* Includes sales of ethanol produced by Tereos

Revenues** In R$ MM

182160

21

+3+47

-24

** Includes the R$ 27.5 million financial impact of the sales of co-

products produced by Tereos BENP and sold by Tereos Syral

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Outlook and Summary

Sugarcane: focusing on operations, investing in production

Brazil: implementation of R$ 800 MM investment program on production

expansion (sugarcane renewal and new planting, industrial capacities) and

cogeneration (bringing stable income)

• Capex financed by BNDES loan of R$ 800 MM obtained in March 2011

Africa: irrigation and planting program under final phase of implementation and

potential expansion capacity being explored

Cereals: capitalizing on starch production knowledge by entering into growing

economies

EU: conversion of BENP Lillebonne into starch facility launched and Selby’s

activities to come on stream in the H1 2012

Brazil: Completion of starch transaction in Brazil (Syral-Halotek)

China: MoU with Wilmar to develop a starch project in China

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Tereos Internacional - Conclusion

20111115 q2 201112_eng_final

Business

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