tereos 1t 2015/16 presentation en

Tereos Internacional First Quarter 2015/16 Results

São Paulo – August 6th, 2015

2

Key highlights and major initiatives in Q1 2015/16

Operational

Sugar & Energy Brazil:

Good start of the crop in Brazil with notable progress in harvesting and industrial efficiency vs. LY

Volumes harvested up 4% vs. LY in the first 100 days of the crop

Sugar Indian Ocean/Africa: Good crop volume prospects both in Indian Ocean and Africa. Impact of

drop of sugar prices in Europe

Starch & Sweeteners and Alcohol & Ethanol in Europe:

Higher ethanol prices contributed to improved performance in the A&E segment

Sales volumes picked up slightly both YoY and QoQ, however tough conditions for pass-through

continue to pressure margins for S&S

Starch & Sweeteners Overseas: Higher volumes YoY both in Brazil and Indonesia. Good progress in

ramp-up of Dongguan facility

Corporate

Sugar & Energy Brazil: Full consolidation of Vertente mill (no change to ownership)

Governance

Fiscal Board: Reelection of the current members approved at AGM

110

130

150

170

190

210

230

250

Jun-14 Sep-14 Dec-14 Mar-15 Jun-15

Corn Matif Wheat Matif

€/MT

3 Source: Bloomberg

Q1 2015/16 Market Highlights

Sugar:

NY#11 prices continued to slide downwards towards the end of Q1

15/16. High inventories on a global basis, expectations of a higher

crop and lower BRL vs. the USD, keep on weighing on the market.

Starch:

Grains prices were mostly steady during Q1 15/16 as weather

conditions in the main grain producing regions were mostly

favorable

A short lived rally took place at the end of June because of

temporary weather concerns in the US

Ethanol:

In Brazil, despite ethanol demand being boosted by last year’s

incentives, prices remained stable in the quarter driven by

seasonal stock build-up and production mix oriented towards

ethanol

In Europe, FOB Rotterdam prices kept their upward trend on

seasonal decrease of the stocks and mothballing of competitor

capacity

10

12

14

16

18

20

300

360

420

480

540

600


LIFFE#5 NY#11

US$/MT US$ Cts/lb

400

450

500

550

600

0,70

0,90

1,10

1,30

1,50

1,70

1,90


Brazil Esalq Europe Rotterdam

R$/m³ €/m³

Revenues Stable revenues at constant currency on increased consolidation perimeter effect

4

Net Revenues (R$ MM)

145 138

1.012 1.137

190 197

457 478

1,805 1,950

Q1 14/15 Q1 15/16

Brazil

Africa/Indian Ocean

Starch & Sweeteners

Alcohol & Ethanol Europe

1805 1950

+147 +65

(72)

+5

Q1 14/15 Currency Volume Price & Mix Others Q1 15/16

Revenues up 8% YoY, but stable at constant currency

Positive translation effect of BRL devaluation vs. Euro (+11% YoY)

Revenue growth in Sugar & Energy Brazil driven by better sugar prices in BRL terms and consolidation

perimeter change (Vertente at 100%). Energy sales delayed (to be recovered in the coming quarters)

In Europe, better ethanol prices making up for lower ethanol sales volumes

Starch & Sweeteners volumes improved while prices were lower YoY (cereal and sugar price effect)

Delayed sales in Indian Ocean and impact of lower European prices

Adjusted EBITDA Improved contribution from A&E segment, while lower prices in Europe impacted S&S and

Africa/Indian Ocean segments

5

Adjusted EBITDA (R$ MM)

Margin 6.3% Margin 9.6%

-3 -3 1 17

55 21

25

-6

95

93

173

123

Q1 14/15 Q1 15/16

Brazil

Africa/Indian Ocean

Starch & Sweeteners


Holding

173

123

(2)

(31)

(34)

+17

(0)

Q1 14/15 Brazil Africa/IO S&S A&EEurope

Holding Q1 15/16

Sugar & Energy Brazil results in line with LY reflecting good start of the crop

Price improvement in the A&E Europe segment

Continuous pressure on Starch & Sweeteners margins on raw materials although benefits from Score

18 and lower energy costs

Sugar Africa/Indian Ocean contribution reflecting lower European sugar prices

+12% YoY

114 131 128

Q1

14/1

5

Q1

14/1

5

Q1

15/1

6

-22% YoY

257 274 202

Q1

14/1

5

Q1

14/1

5

Q1

15/1

6

+2% YoY

296 297 303

Q1

14/1

5

Q1

14/1

5

Q1

15/1

6

+1% YoY

6.5 7.1 6,6

Q1

14/1

5

Q1

14/1

5

Q1

15/1

6

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

6

Sugar and Energy Brazil – Production & Sales Good start of the crop, despite rainy weather

Energy Sales (‘000 MWh)

* Proforma figures consider 100% of Vertente

Crushing (proforma basis)

Satisfactory progress on mechanical harvesting efficiency vs. LY

Yields at 87 ton/ha (vs. 95 ton/ha LY) and TRS at 123 kg/t (vs. 133 kg/t LY)

TRS/ha at 10.6 t, 4% above C/S region average (-16% YoY)

Crushing down 7% due to higher rain levels in Q1 this year. But 4% ahead of LY in the first 100 days of the crop

Improvement in production efficiency (proforma basis)

Overall production (expressed in TRS) at 806 kt (-13%). Sugar Production: 427 kt, -16% YoY;

Ethanol Production: 213 km³, -10% YoY

Substantial progress in industrial efficiency vs. LY, as a result of improvement in intercrop maintenance

Improved relative attractiveness of ethanol and lower yields resulted in a mix less oriented towards sugar (55% vs.

57%)

Progress on cogeneration (proforma basis)

Own energy sales delayed, at 202 GWh in Q1 15/16 (to be recovered in coming quarters)

As Reported Proforma* Q1 15/16 As Reported Proforma* Q1 15/16 As Reported Proforma* Q1 15/16 As Reported Proforma* Q1 15/16

Sugar & Energy Brazil – Financials Revenues supported by better sugar prices on stable Adjusted EBITDA (as reported)

* includes Cogeneration, Agricultural Products, Hedging and Ethanol Resale

7

(1) Tereos Internacional allocates tilling expenses as cost.

If tilling expenses were allocated as investment, Adjusted

EBITDA for Q1 15/16 would have reached R$153 million.


Sugar Ethanol

Adjusted EBITDA: R$93 million, -2%

Change in consolidation of Vertente beginning

this quarter

Results in line with LY (as reported)

When including tilling as depreciation margins

at 32.0% vs. 30.0% LY

Key Figures

In R$ Million Q1 15/16

Q1 14/15

Proforma*

Q1 14/15

As

reported

Change

As

Reported

Revenues 478 483 457 +5%

Gross Profit 15 70 74 -80%

Margin 3.1% 14.4% 16.1%

EBIT (77) (21) (14) n/m

Margin (16.2%) (4.3%) (3.0%)

Adjusted EBITDA 93 105 95 -2%

Margin 19.5% 21.8% 20.8%

*

* Proforma figures consider 100% of Vertente

457 478

+30 +6

(5)

+18

(27)

Q1 14/15 Price & Mix Volume Price & Mix Volume Others Q1 15/16

Sugar: 58% of total net revenues

Volumes: +2% to 303 k tonnes

Prices: +7% YoY at 913 R$/tonne

Ethanol: 32% of total net revenues

Volumes: +12% to 128 k m3

Prices: -3% YoY at 1,216 R$/m3

Cogeneration: R$37 million vs. R$43 million

-7% YoY

63

59

Q1

14

/15

Q1

15

/16

Sugar Africa/Indian Ocean – Production and Financials Results reflect lower sugar prices in the European market vs. LY

8

Sugarcane Crushing (’000 t) Sugar sales (‘000 t)

Revenue Breakdown by Product Sugarcane crushing

Indian Ocean: no processing activities, as usual

Africa: Good operational progress in crushing (79

kt vs. 15 kt)

Revenues: +4% YoY

Lower specialty sugar sales this quarter, but

should be caught up. Lower European prices and

positive currency effect

Adjusted EBITDA: -122% YoY

Drop mostly related to Indian Ocean’s lower

revenues on similar cost base, while stable

Adjusted EBITDA for Africa (traditionally negative

at the start of the crop)

Key Figures

In R$ Million Q1 15/16 Q1 14/15 Change

Revenues 197 190 +4%

Gross Profit 26 35 -27%

Margin 13.0% 18.5%

EBIT (14) 11 n/m

Margin (7.3%) 5.6%

Adjusted EBITDA (6) 25 n/m

Margin (2.9%) 13.3%

+424% YoY

15

79

Q1

14

/15

Q1

15

/16

Sugar Indian Ocean 51%

Sugar Africa 4%

Trading and others 45%

Cereals Consolidated - Production and Sales Volumes Growth in Starch & Sweeteners sales volumes

9

Cereals Grinding (‘000 t)

Starch & Sweeteners Sales (‘000 t)

Alcohol & Ethanol Sales (‘000 m3)

Grinding in Q1 15/16: +5% to 900k tonnes

Starch & Sweeteners sales: +15% Volume growth in Europe, Brazil and Asia

Alcohol & Ethanol Europe sales: -21% Sales volumes of ethanol in Europe in line with production, but lower than LY (destocking effect in Q1 LY). Alcohol sales remain stable

Co-products Sales (‘000 t)

-21% YoY

83 66

Q1

14

/15

Q1

15

/16

+5% YoY

301 315

Q1

14

/15

Q1

15

/16

+15% YoY

474 544

Q1

14

/15

Q1

15

/16

+5% YoY

858

900

Q1

14

/15

Q1

15

/16

Starch & Sweeteners – Financials Growth in volumes, but margin pressure remains

10


Revenues: R$1,137 million, 12% up YoY

Sales volume pick-up in Europe but lower prices YoY, particularly for sweeteners and functional

sweeteners (cereal and sugar price effect)

Higher volumes in Brazil and perimeter effect of Indonesia contributed positively to revenues

Adjusted EBITDA: R$21 million, down 62% YoY

Pressure on margins on raw materials remained strong in Q1, especially on sweeteners and

functional sweeteners (sugar)

However, performance improvement plan and lower energy prices contributed to improved

results sequentially

Key Figures


Revenues 1,137 1,012 +12%

Gross Profit 175 176 -1%

Margin 14.5% 16.0%

EBIT Europe -26 24 n/m

EBIT Start-up Operations -13 -13 +1%

EBIT Total -39 10 n/m

EBIT Total Margin (3.3%) 1.0%

Adjusted EBITDA 21 55 -62%

Margin 1.7% 5.4%

1012 1137

+110 +110

(97)

+3


145 138

+16

(33)

+7 +3


Alcohol & Ethanol Europe – Financials Recovery in ethanol prices on improved market conditions

Revenues: R$138 million, down 5%

Improved price conditions with Rotterdam T2 prices up on LY (+14%)

Sales volume in line with production, but lower than LY (destocking effect in Q1 last year)

Adjusted EBITDA: R$17 million vs. R$1 million LY

Better ethanol prices and lower energy costs more than compensated for lower volumes sold

Segment’s results on a like-for-like basis, with ethanol trading for Tereos Group no longer impacting

analysis

11


Key Figures


Revenues 138 145 -5%

Gross Profit 25 (4) n/m

Margin 17.3% (2.8%)

EBIT 6 (11) n/m

Margin 4.6% (7.4%)

Adjusted EBITDA 17 1 n/m

Margin 12.0% 0.4%

172 188 188

+1 +14

(2)

+3 (0)

Q1 14/15 Brazil Africa/IO S&S A&EEurope

Holding Q1 15/16

Capital Expenditures Slight increase in CAPEX focused on planting of sugarcane

12

Sugarcane: R$157 million

Increased focus on planting to keep fields

average age at comfortable levels

Starch & Sweeteners: R$27 million

Stable investments YoY mostly focused on

industrial efficiency gains

CAPEX (R$ MM) CAPEX Breakdown

Starch & Sweeteners

15%


2%

Africa/Indian Ocean 28%

Brazil 55%

13

Cash Flow Reconciliation & Debt Composition Seasonal working capital impacted net debt

Vertente mill consolidation since this quarter impacted debt as well. On a like-for-like basis, net debt

would be 12% higher due to seasonal effect coupled with delayed crop impact

Higher leverage from 5.5x on March 31st, 2015 to 6.7x on June 30th, 2015 on weaker trailing

Adjusted EBITDA

Cash Flow

In R$ Million Q1 15/16

Adjusted EBITDA 123

Working capital variance (544)

Financial interests (72)

Others (68)

Operating Cash Flow (562)

Recurring Capex (151)

Recurring Cash Flow (712)

Growth Capex (36)

Dividends paid and received

-

Others (464)

Free Cash Flow (1,212)

Others (inc. Forex impact) 153

Net Debt Variation (1,059)

Debt

In R$ Million

June 30th,

2015

March 31st,

2015 ∆

Current 2,217 1,908 +16%

Non-current 3,641 3,419 +6%

Amortized cost (23) (23) -2%

Total Gross Debt 5,835 5,304 +10%

In € 1,466 1,312 +12%

In USD 3,224 3,069 +5%

In R$ 1,155 931 +24%

Other currencies 13 15 -14%

Cash and Cash Equivalent (661) (1,180) -44%

Total Net Debt 5,174 4,124 +26%

Related Parties Net Debt 149 140 +6%

Total Net Debt + Related Parties

5,323 4,264 +25%

Proforma (100% Vertente) 5,323 4,734 +12%

14

Outlook Sugar & Ethanol Brazil:

High stocks worldwide and USD appreciation vs. Real to continue weighing on world sugar prices in 2015/16

Ethanol demand expected to remain strong in H2

Current expectation is for similar crushing volumes as LY

Overall operational efficiency expected to continue improving along the crop

Sugar Africa/Indian Ocean:

Lower sugar prices in Europe on average to impact results contribution

Higher crop volumes expected both in Indian Ocean and Africa

Starch & Sweeteners and Alcohol & Ethanol:

Europe:

Better ethanol prices on average to benefit Alcohol & Ethanol segment

Performance program to be felt progressively, but market for Starch & Sweeteners in Europe remains

difficult

Overseas:

Brazil: Volumes to remain stable on maximization of mix despite weak economic environment

Asia: Increasing grinding volumes in Indonesia driven by improvement in industrial efficiency and good

demand levels. Growing sales of starch in Tieling factory coupled with good start of Dongguan factory

tereos 1t 2015/16 presentation en

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