3. Q3 Financial Highlights: Record net income and strong growth in
revenues
Strong growth in revenues and operational results
Record net result of R$ 143 million
Revenue : R$1.59 billion
• Year-on-Year: + 31.3% + 47.7% at constant currency
3
* Adjusted EBITDA : EBITDA excluding non recurring items from discontinued operations, accounting effect of the adjustment in the fair value of the
biological assets and financial instruments
Adjusted EBITDA*: R$260 MM
• Year-on-Year: + 28.2% + 34.7% at constant currency
Net Result: R$143 MM vs. R$14 MM in Q3 2009/10
Sugarcane: Significant growth fueled by capacity investments, acquisitions and strong
market conditions
Cereal: Initial contribution from new contracts and strong demand benefits revenues
4. Sugarcane
Strong market fundamentals
• Brazilian Center South: crushing and sugar production below estimates due to dry weather
• Sugar prices back to levels seen during Q4 2009/10 on concerns over reduced availability
• Rising ethanol prices: + 21.5% for hydrous in Q3
• Reduced supply due to high sugar prices and strong domestic demand
Investment Agreement with Petrobras Biocombustível: completion of second step
Q3 Highlights: Strong market fundamentals for Sugar, Challenging
environment for Cereals
4
• Petrobras now shareholder of Guarani at 26.5%
Cereal
Challenging market environment, due to the increase in cereal prices
• Wheat: prices increased in December on concerns over poor weather conditions in certain
producing countries combined with lower US corn crop forecasts
• Starch & sweeteners: improving market conditions in Europe. Positive Q3 demand mitigated
traditional seasonal slowdown
• Ethanol: rising prices driven by tighter supply-demand balance
Studying R$ 230 MM investment to establish Brazilian starch operation
6. 1,212
1,591
(135)
+ 349
+ 165
612 593
63 231
344
624
Brazil
Indian Ocean
Starch Europe
Ethanol Europe
Total Holdings
In R$ MM
1,591
+ 31.3%
1,212
Revenues driven by positive contribution from sugarcane
Q3
Q3 2009/10 Currency Volume Price & Mix Q3 2010/11
193 143
Q3 2009/10 Q3 2010/11
6
Sugarcane
• Brazil: growth driven by a 50.1% increase in sales volumes and a price increase of 10.2%
• La Réunion: contribution of GQF acquisition
Cereal
• Starch Europe: + 14.4% at constant exchange rate. Prices up 5.7% driven by application of first
contracts negotiated after cereal prices increase. Negative currency effect of R$94.2 million
• Ethanol Europe: - 12.8% at constant exchange rate. Volumes down due to 3-week maintenance
stoppage at the Lillebonne plant. Negative currency effect of R$28.8 million
7. 78
67
45
76
85
83
49
44
112
151 Brazil
Indian Ocean
Starch Europe
Ethanol Europe
Total Holdings
Ajusted EBITDA and EBITDA: Solid rise driven by Sugarcane
Q3
In R$ MM
+ 28.2%
202
260
Adjusted EBITDA EBITDA
In R$ MM
+ 22.5%
173
212
319 12
Q3 2009/10 Q3 2010/11
319 12
49
-12
Q3 2009/10 Q3 2010/11
Sugarcane
• Higher volumes and margins in Brazil
• Improved operational results in Mozambique and first contribution of the Groupe Quartier Français in La Réunion
• Fair value of financial instruments negative R$58 million following surge in world sugar prices
• Fair value of biological assets negative R$7 million
Cereal
• Starch: margins reflect higher cereal and energy prices after surge in world cereal prices
• Ethanol: margins impacted by lower volumes and higher energy costs
• Fair value of financial instruments positive R$18 million following surge in cereal and energy prices
7
8. 260
212
156
131
167
143
-48
71
-25
35
-24
From Adjusted EBITDA to Net Income
Q3 2010/11
In R$ MM
Perimeter and other adjustments
in Brazil: +R$44 million
Fair value of biological assets: -R$7 MM
Fair value of financial instruments: -R$40 MM
Accounting impact of the difference
between the price paid for Quartier
Français and its equity value
-127
-25
Adjusted
EBITDA
Adjustments EBITDA Depreciation
&
Amortization
Acquisition
Impact
Operating
Income
Net Financial
Expenses
Net Income
Before Tax
Income Tax Net Income Minority
Interest
Net Income
Group Share
8
9. Cash Flow reflecting the rise in Working Capital
Cash Flow
In R$ Million
Q3 2010/11
Adjusted EBITDA 260
Working capital variance (298)
Other operating (1 )
Operating Cash Flow (39)
Financial interests net of dividends paid and received (35)
Capex net of proceeds from the disposal of assets (140)
Total net debt increase:
R$153 million vs. September 30, 2010
Working capital variance:
• R$181 million in Brazil
• R$70 million in La Réunion
9
Capex (145)
Proceeds from the disposal of assets 5
Cash Flow before acquisition and capital increase (213)
Acquisition & Perimeter impact 30
Capital increase 0
Free Cash Flow (183)
Forex impact 30
Total net debt (153)
• R$70 million in La Réunion
• R$51 million for Cereal segment
10. Real
31%
Others
2%
Debt – Stable Net Debt/ Adjusted EBITDA from last quarter, despite
seasonal increase in working capital
Gross Debt
Breakdown by currency
Debt
In R$ Million
Dec 31, 2010 Sep 30, 2010 Change
Current 1,645 1,667 - 1.3%
Non-current 1,268 1,236 + 2.6%
Amortized cost (15) (16) - 6.2%
Total Gross Debt 2,914 2,903 + 0.4%
In € 1,365 1,388 - 1.7%
In USD 573 757 - 24.3%
In R$ 909 703 + 29.3%
Euro
47%
US Dollar
20%
10
Net Debt: R$2,570 million + 6.4% vs. September 2010
Net Debt/ Adjusted EBITDA: stable at 3.4x
In R$ 909 703 + 29.3%
Other currencies 66 55 + 20.0%
Cash and cash Equivalent (299) (440) - 48.0%
Total Net Debt 2,599 2,447 + 6.2%
Related Parties Net Debt (29) (31) - 6.4%
Total Net Debt + Related Parties 2,570 2,416 + 6.4%
13. Sugarcane – Sharply increased sugar and ethanol sales due to
commercial strategy of maximized sales in the intercrop season
Production and Sales
Ethanol Sales (‘000 m³) Energy Sales (‘000 MWh)Sugarcane Crushing (MM t) Sugar Sales (‘000 t)
3,9
0,4
5,9
8,8
4,0
Q3
09/10
Q4
09/10
Q1
10/11
Q2
10/11
Q3
10/11
267 238 213
488
424
Q3
09/10
Q4
09/10
Q1
10/11
Q2
10/11
Q3
10/11
120 120
99
179
164
Q3
09/10
Q4
09/10
Q1
10/11
Q2
10/11
Q3
10/11
32 7
42
113
81
Q3
09/10
Q4
09/10
Q1
10/11
Q2
10/11
Q3
10/11
13
Q3 Sugarcane crushing: 4.0 million tons (+ 2.7% year-on-year)
Stable product mix despite recent acquisitions: 57% sugar and 43% ethanol
• Increased sugar production capacity in São José and Cruz Alta and start up of Tanabi’s sugar
factory
2010/11 crop year outlook:
• Crop year 2010/11: 19.7 million tons, + 43% year-on-year
• Third-party sugarcane: 65%
• Product Mix : 58% sugar and 42% ethanol
• Sugar production: 1,556 thousand tons, + 65% | Ethanol production: 692 000 m³, + 47%
• Cogeneration: 235.4 GWh, +112.5% (April to December)
14. Sugarcane Brazil – Strong rise in revenues and Adjusted EBITDA
Financials
Key Figures
In R$ Million
Q3
2010/11
Q3
2009/10
Change
Reported
Revenues 624 344 + 81.7%
Gross Profit 163 61 + 166.5%
Gross Margin 26.1% 17.8%
EBITDA 85 76 + 12.4%
EBITDA Margin 13.6% 22.0%
Adjusted EBITDA 151 112 + 35.0%
Adjusted EBITDA Margin 24.2% 32.6%
EBIT 17 30 - 41.0%
EBIT Margin 2.8% 8.6%
Adjusted EBIT 84 66 + 26.8%
Adjusted EBIT Margin 13.4% 19.2%
In R$ MM
Revenues
344
624
+19
+150 +12
+45
+54
*
14 * includes Cogeneration, Agricultural Products and Hedging
Adjusted EBIT Margin 13.4% 19.2%
Capex 58 14 + 314.3%
Gross Margin: increased from R$61 million to
R$163 million
• Effect of the adjustment in sugarcane prices of
R$49 million, correlated to the increase in sales
prices
Capex:
• Cogeneration
• Q3 2010/11: R$58 million
Sugar: 63.8% of total revenue
• Sales volume: + 58.7% vs. Q3 2009/10
• Price (R$/ton): + 13.6% vs. Q3 2009/10
• White sugar mix down to 78%
Ethanol: 26.8% of total revenue
• Sales volume: + 37.4% vs. Q3 2009/10
• Price (R$/m³): + 11.0%
• Anhydrous: 40.8% of total ethanol produced
vs. 25.0% in Q3 2009/10
Sugar Ethanol
Q3 2009/10 Price&Mix Volume Price&Mix Volume Others Q3 2010/11*
15. Sugarcane Indian Ocean – Strong results
Production and Financials
Key Figures
In R$ Million
Q3
2010/11
Q3
2009/10
Revenues 230 63
Gross Profit 78 (26)
Gross Margin 34.0% -41.3%
EBITDA 45 -
EBITDA Margin 19.5% -
Adjusted EBITDA 44 (11)
Adjusted EBITDA Margin 19.1% -18.5%
Capex 11 1
La Réunion
Sugarcane Crushing (’000 t)
Mozambique
Sugarcane Crushing (‘000 t)
547
989
874
Q3
09/10
Q4
09/10
Q1
10/11
Q2
10/11
Q3
10/11
175
0,0 0,0
230
289
Q3
09/10
Q4
09/10
Q1
10/11
Q2
10/11
Q3
10/11
Mozambique
Crop year terminated on December 5
Sugarcane crushing was of 536,000 tons and sugar
production was 21% higher at 46,000 tons of sugar
Solid revenue growth: + 60.5% at constant exchange
rate
Adjusted EBITDA: R$ 13 million, after excluding the fair
value on biological effect of the sugarcane assets in R$
1 million
Capex:
• Expansion of irrigation and sugarcane fields
renovation
• Q3 2010/11: R$1 million
La Réunion
Crop year terminated on December 12 at Bois Rouge and
on December 15 at Le Gol
Sugarcane crushing was of 1.9 million tons and production
more than doubled, at 207,000 tons of sugar
Revenues: + R$163 million vs. Q3 2009/10
Adjusted EBITDA: R$ 31,2 million
Capex:
• Investments to improve sugar quality and added-
value products
• Q3 2010/11: R$10 million
15
21. The starch market in Brazil represents 1.8 million tons and is growing
strongly
Our project: a plant based in corn, to produce starch, glucose syrup and
derivatives
Key points of Tereos Internacional:
• Guarani’s customers base in Brazil
Tereos Internacional Investment on the Starch Sector in Brazil
21
• Guarani’s customers base in Brazil
• Guarani’s distribution network in Brazil
• Guarani’s industrial platform
• The diversified and innovative Syral’s product portfolio
• Close relations between Syral and food & nonfood multinationals, built via
R&D in Europe
22. Good performance in Q3, with net income of R$143 million and Adjusted
EBITDA of R$260 million
• Excellent results for sugarcane activities in all regions
• And despite a still difficult environment for the cereal segment
Positive outlook based on solid fundamentals for sweeteners and ethanol
• Global stocks remain low for sugar and ethanol
• Improvement in commercial conditions in the European starch and
sweeteners market, with the signing of contracts for Q4
Tereos Internacional – Conclusion
22
sweeteners market, with the signing of contracts for Q4
Tereos Internacional well positioned in a favorable environment
• Tereos Indian Ocean to continue consolidation process of Quartier Français,
in La Réunion
• Guarani will benefit from its strong sugar position and its partnership with
Petrobras Biocombustível
• Tereos International will capitalize on the experience of Syral to enter a
market with strong growth: the starch in Brazil
