Tereos
2014/15 Full Year Results
10th June 2015
Disclaimer
This document was prepared by Tereos (the “Company”) for the sole purpose of the presentations of its results for
the financial year ended on 31 March 2015.
The following discussion of our financial condition and results of operations should be read in conjunction with
our consolidated financial statements and their related notes. Our financial statements have been prepared in
accordance with the International Financial Reporting Standards (“IFRS”) as adopted for use in the European
Union.
This document contains certain statements that are forward-looking. These statements refer in particular to the
Company’s forecasts, its expansion of operations, projections, future events, trends or objectives which are
naturally subject to risks and contingencies that may lead to actual results materially differing from those explicitly
or implicitly included in these statements. Such forward-looking statements are not guarantees of future
performance. The Company, as well as its affiliates, directors, advisors, employees and representatives, expressly
disclaim any liability whatsoever for such forward-looking statements. The Company does not undertake to update
or revise the forward-looking statements that may be presented in this document to reflect new information, future
events or for any other reason and any opinion expressed in this presentation is subject to change without notice.
This document does not constitute, or form part of, an offer or invitation to sell or purchase, or any solicitation of
any offer to purchase or subscribe for, any securities of the Company in any jurisdiction whatsoever. This
document shall not form the basis of, or be relied upon in connection with, any contract or commitment
whatsoever.
In this document, Adjusted EBITDA means EBITDA excluding accounting effect of adjustments in the fair value of
the financial instruments, in the fair value of biological assets and non-recurring items (mainly disposals of
subsidiary). EBITDA corresponds to net income adjusted by net financial income (loss), share of profit of
associates, income taxes, change due to harvest expenses, and depreciation/amortization which are linearly
recognized on the reference fiscal year. These depreciation/amortization previously identified according to the
production period are now recognized linearly at March 31st, 2015 for EBITDA calculation needs, in accordance with
the internal reporting of the Company. EBITDA published for the fiscal year ending at March 31st, 2014 has been
restated on the same basis for comparison purposes. Price complements are now also recognized on the same
basis as depreciation and amortization for EBITDA calculation. EBITDA is not a financial or accounting measure
defined by IFRS as a measurement of financial performance and may not be comparable to other similarly-titled
indicators used by other companies. EBITDA is provided as additional information only and should not be
considered as a substitute for net cash provided by operating activities, operating income or net income.
Please note that all percentages included in the following presentation may be calculated on non-rounded figures
and therefore may vary from percentages calculated on rounded figures.
.
Tereos continues to strengthen in an adverse
environment
 An unprecedented market environment
•
World sugar prices at lowest level in 7 years
•
European sugar prices at historical low
•
Ethanol prices at lowest level in 6 years
•
Starch market in Europe in 20% over-capacity
 Tereos continues to strengthen
•
A growing business
•
Sugar: 3rd largest producer in the world
•
An operational performance plan delivering results: 30 M€
•
Successful start of major industrial investments internationally
•
A strengthened distribution structure: Tereos Commodities and Napier Brown
– page 3 –
2014/15 Full Year Results
A growing business despite the environment
STARCH-BASED
PRODUCTS
ALCOHOL
AND ETHANOL
SUGAR
3.9 Mt
1.9 Mm3
+4.3 %
+16.5 %
2.1 Mt
+10.1 %
#3
worldwide
3.9 Mt
of sugar
#2
in Brazil
– page 4 –
#1
in France
2014/15 Full Year Results
Tereos continues to strengthen in an adverse
environment
Revenues (M€)
 Revenues: 4 300 M€

Reflecting the historical fall in prices
4 697
1 602
•
World sugar price -15%
2004/05 Sept
12 months
•
European sugar price -24%
Adjusted EBITDA (M€)
 Adjusted EBITDA: 453 M€
13/14 March
12 months
14/15 March
12 months
703
453

Operating margin: 10.5 %

Resilient operational results in a very difficult
environment

4 300
221
2004/05 Sept
12 months
13/14 March
12 months
14/15 March
12 months
Net result (M€)
Très forte baisse des prix sur le marché intérieur, de l’ordre de 200€/t sur176
l’exercice,
17
sousresult
la pression
de niveaux
de stocks
9
Net
(after
price cplts)
: 17élevés
M€
2004/05 Sept
12 months
– page 5 –
13/14 March
12 months
14/15 March
12 months
2014/15 Full Year Results
Our activities
Sugar International
Brazil: a strategic presence
Sugar International
 #1 sugar producer in the
world
 50% of the world sugar
market
 Lowest production cost
globally
 Tereos, #2 sugar producer in
Brazil
– page 8 –
2014/15 Full Year Results
Brazil: Tereos’ agricultural yields 15% higher than
the competitors’
Sugar International

State-of-the-art mechanization and automation
•
•

Agricultural excellence
•
•

99% for harvesting
76% for planting
Sugar yields higher by 15% than the Center/South region in
Brazil, for the 3rd year in a row
Brazilian agricultural award for the 2nd year in a row (CTC)
Cogeneration: a dynamic market
•
•
Tereos: 10% of Brazilian cogeneration
1 000 GWh of energy sold increasing by 32%
– page 9 –
2014/15 Full Year Results
Sugar: a 5th year of global surplus
 World inventories at the highest level in more than 10 years
 Sugar price dropping down to 12 USD cts/lb
 Average at 15.8 USD cts/lb (-7% vs. last fiscal year average)
USDcts/lb 40
100
Mt
90
80
30
70
60
20
50
40
12,1
Cts/lb
30
10
20
10
0
0
2009
2010
2011
2012
2013
2014
2015
Source: FO Licht
Ending inventories in Mt raw value
World price (NY11) in USDcts/lb
– page 10 –
2014/15 Full Year Results
Sugar Europe
A good operational performance
Sugar Europe
 Agricultural performance :
•
High agricultural yields: 3rd best performance
ever
•
Increased beet surfaces:+4% between 2013-14
and 2014-15
•
Beet production increasing by 13% in Europe
 Industrial performance:
•
Continued deployment of the energy saving
plan initiated in 2012 in the French sugar factories
•
Start of a second sugarbeet vinasse
methanization unit in Dobrovice in the Czech
Republic
– page 12 –
2014/15 Full Year Results
Historic drop in sugar price in Europe
 Very sharp decline in domestic market prices, around 200€/t over the
year, as a result of high stocks levels
€/t
Mt
3,0
750
700
2,5
650
2,0
600
550
1,5
500
1,0
450
400
0,5
350
0,0
300
Quota sugar inventories (end September) - Mt
EU quota sugar price (€/t) - ex-works
Source: European Community + “Observatoire communautaire du prix du sucre” (SNFS)
– page 13 –
2014/15 Full Year Results
European ethanol prices at a low level
FOB Rotterdam Ethanol Price (T2 €/m3)
750
700
650
Average 2011/12: 603 €/m3
Average 2012/13: 648 €/m3
600
550
Average 2013/14: 568 €/m3
500
450
Average 2014/15: 476 €/m3
400
Très forte baisse des prix sur le marché intérieur, de l’ordre de 200€/t sur l’exercice,
sous la pression de niveaux de stocks élevés
– page 14 –
2014/15 Full Year Results
Resilient operational results in a very difficult
environment
European sugar businesses
EBIT Margin
25% 25%
21%
• A significant drop in margins
over two years
21%
20%
15%
• Strong relative resilience
from Tereos compared to the
sector
10%
20%
15%16%
17%
17%
16%
16%
16%
16%
16%
14%
14%
14%
16% 16%
14%
10%
13%
12%12%
13%
11%
11%
9%
5%
9%
7%
7%
5%
0%
0%
2011-12
2011-12
2012-13
2012-13
2013-14
2013-14
1%
0%
1%
0%
2014-15
2014-15
Südzucker Sugar - EBIT Margin
Tereos Sugar Beet - EBIT Margin
Cristal Union - EBIT Margin
Nordzucker - EBIT Margin
Très forte baisse des prix sur le marché intérieur, de l’ordre de 200€/t sur l’exercice,
sous la pression de niveaux de stocks élevés
Source: Tereos, Südzucker, Nordzucker and Cristal Union
1)
2)
– page 15 –
Corresponds to operating margin excluding exceptional items 2013-14.
Closing date 30th September
2014/15 Full Year Results
Starch & Sweeteners
Starch and sweeteners market: differing dynamics
Starch and sweeteners
 A stable market in Europe
 Significant industrial overcapacity in Europe
 Significant benefits coming from the S&S Europe
performance plan
 Potato cooperatives becoming member of the
Tereos coop: Haussimont in March 2014 and Vicsur-Aisne in December 2014
• Potato-starch production to double at Haussimont
within 3 years
 A strong growth in Asia and Brazil
Global starch
consumption by
geography
in 2013
13%
North
America
4%
South
America
China: +20%
20142019
14%
Europe
66%
Asia
2%
Africa
1%
Oceania
Source
Source
: Giract
: Giract
- Tereos
- Tereos
– page 17 –
2014/15 Full Year Results
Decreasing cereal prices
Price in €/t
300
280
260
240
220
200
180
160
140
120
100
Matif Wheat
Matif Corn
Source: Bloomberg
 Decrease of average cereal prices, e.g. Matif Wheat -9% and Matif corn -15%,
because of grain surplus in 2014/15 despite lower EUR/USD
 Corn: strong increase of ending stocks especially in the US weighted on the
market
 Wheat: less bearish outlook – smaller surplus and Russia wheat export policies
supporting the market
– page 18 –
2014/15 Full Year Results
Start and ramp-up of our plants in emerging markets
Palmital, Brazil
Cilegon, Indonesia

Inauguration in July 2014


Operation at full capacity of
150,000 t of corn and 150,000 t
of cassava per year
Acquisition in 2014 and ramp-up
during the fiscal year

Processing capacity of 330,000 t
of corn per year
Tieling, China
Dongguan, China

Started in March 2015

Acquisition in 2013 of 49%

Processing capacity of 500,000 t of
wheat per year

Processing capacity of 700,000 t of
corn per year
Très forte baisse des prix sur le marché intérieur, de l’ordre de 200€/t sur l’exercice,
sous la pression de niveaux de stocks élevés
– page 19 –
2014/15 Full Year Results
Results 2014/15
Revenues
(M€)
4 920
4 409
3 586
2 103
2 177
2005/06
Sept
2006/07
Sept
3 309
4 697
4 300
3 529
2 555
1 602
2004/05
Sept
2007/08
Sept
12 months
2008/09
Sept
2009/10
Sept
2010/11
Sept
2011/12
March
2012/13
March
2014/15
March
12 months
6 months
PF
– page 21 –
2013/14
March
Published Published
2014/15 Full Year Results
Revenues by product
Revenues split by product
12 %
Others (incl. energy)
12 %
Sugar (sugarbeet, cane)
Co-products
10 %
48 %
Starch and other derivatives
(cereals)
18 %
Alcohol / ethanol
(sugarbeet, cane, cereals)
– page 22 –
Sweeteners (cereals)
2014/15 Full Year Results
Revenues by division
 Sugarbeet
•
-8%
4 698
4 300
18
1031
19
1 028
Very significant quota sugar and ethanol
price decrease; volume increase (better
yields)
 Cane
•
+22M€ revenues excl. negative FX impact.
1 457
•
Brazil: record volumes at 20.2Mt; higher
ethanol and electricity volumes sold
2011
1 796
•
Africa/Indian Ocean: lower price for
exported sugar to EU, increase of cane
volumes in Mozambique
2013/14 March
Actual
2014/15 March
Actual
1638
Sugarbeet
Cereals / Potatos
Cane
Others
Revenues at constant exchange rate: 4,335M€
– page 23 –
 Cereals
•
Europe: strong S&S and ethanol price
decrease in weak environment
•
Significant ramp-up of corn sweeteners
sales in Brazil; integration of Indonesia
2014/15 Full Year Results
Adjusted EBITDA evolution
794
752
703
596
519
453
440
358
286
259
221
2004/05
Sept
2005/06
Sept
2006/07
Sept
2007/08
Sept
12 months
2008/09
Sept
2009/10
Sept
2010/11
Sept
2011/12
March
2012/13
March
2014/15
March
12 months
6 months
PF
– page 24 –
2013/14
March
PF 14/15
Published
2014/15 Full Year Results
Adjusted EBITDA by division
703
 Sugarbeet
-36%
•
Satisfactory industrial performance during
2014 crop; lower energy costs
•
Strong sugar and ethanol price decrease
232
453
89
 Sugarcane
173
78
383
•
Brazil: positive effect of higher ethanol and
electricity sold. Profits impacted by standing
cane, tilling/leasing cost increase, not
compensated by industrial performance
•
Africa/Indian Ocean: lower sugar price for
export to EU
205
2013/14 March
Actual
Sugarbeet
2014/15 March
Actual
Cereals / Potatos
Cane
Others
 Cereals
EBITDA at constant exchange rate: 458M€
– page 25 –
•
Europe: lower energy price and benefits of
efficiency plan; tough market conditions
maintained pressure on margins
2014/15 Full Year Results
Reduced investments in the year
Brazil multi-year program completed
 Cane
CAPEX (excluding financial investments) ¹
•
653
Multi-year capacity expansion and
cogeneration plan completed in Brazil
538
 Cereals
451
369
•
Efficiency program in Europe
 Sugarbeet
•
FY 11/12 Sept
12 Months
FY 12/13 March
12 Months
FY 13/14 March
12 Months
Energy efficiency program
FY 14/15 March
12 Months
¹ Excluding JVs
– page 26 –
2014/15 Full Year Results
Group free cash-flow
Tereos Group (in M€)
Net Debt Variation - 12 months
Net Debt - opening position
FY 14/15
(A)
EUR = 3,12 BRL
-1 960
Adjusted EBITDA (before price complements)
453
Income taxes paid
-28
Financing interests (paid/received)
Changes in working capital
-119
25
Cash provided by (used in) operating activities
331
Capex
-369
Financial investments and disposal of assets
Net Investments
-27
-396
Cash provided before Dividends and Capital Increase
-64
Dividends (paid/received) and price complements
-9
Capital increase
88
Free Cash-Flow
14
Others (incl. forex impact)
-79
Net Debt Variation
-64
Net Debt - closing position
– page 27 –
-2 025
2014/15 Full Year Results
Stable net debt at around 2 bn€
Lower by 100 M€ at constant exchange rate
2 106
1 684
2 099
2 024
2 166
2 212
6.1 x
4.7 x
5.6 x
x
3.1 x
2.5 x
3.5 x
2.8 x
2.1 x
Mar09(A)
Net DEBT
– page 28 –
4.5 x
3.8 x
4.7 x
Sep08(A)
2 025
1 960
Mar10(A)
Mar11(A)
Leverage
Mar12(A)
2.8 x
2.8 x
2.4 x
2.6 x
Mar13(A)
Mar 14(PF)
4.1 x
Mar15(A)
Leverage restated for seasonal Working Capital
2014/15 Full Year Results
Debt maturity profile
Gross Debt maturity by fiscal year (April to March)
700
Average maturity:
March 15: 2.6 years
March 14: 2.9 years
600
87
€ Million
500
285
178
400
500
101
300
200
x
346
331
264
100
192
104
81
41
0
2016
2017
Mid-term bank facilities
2018
2019
Extendible Short-term lines
2020
2021
Revolving facilities
2022 and after
Bonds
 Financial security: 903M€ at end March 2015
• Undrawn bank facilities: 514M€
• Cash and cash-equivalent: 389M€
– page 29 –
2014/15 Full Year Results
Group rating
Group rating
BB/Stable
Ba2/Stable
Bond 2020 rating
BB
Ba3
Last change
05/05/2015
12/18/2014
– page 30 –
2014/15 Full Year Results
2015-16 Outlook
 Sugar Europe: a challenging environment
•
Sugar prices down at the beginning of the year before stabilization
 International: an important contribution to the results
•
Increasing impact of international investments : Brazil, Asia, Africa
 Performance plan: another significant contribution
 Group operational margin expected at comparable level
in 2015/16
– page 31 –
2014/15 Full Year Results
Mid-term perspectives
Pursuing the implementation of our strategy
Strengthen our competitiveness
on more open and volatile
markets
• Agricultural competitiveness
• Industrial competitiveness
• Development of our distribution
capabilities
– page 33 –
Take advantage of development
potential on emerging markets
• World sugar and starch consumption
fuelled by growth in emerging countries
• Ramp-up of our recent industrial
investments
2014/15 Full Year Results
Tereos is one of the most competitive players
in industry
 Ambitious performance plan: an objective of recurring operational
gains of 100M€ within 3 years
Industrial transformation costs
for Sugarbeet in France
215
212
€/t 210
sugar
208
208
205
199
200
195
190
Average
France
Tereos
Competitor A Competitor B
Source : LMC – EU cost competitiveness by factory - 2014
– page 34 –
2014/15 Full Year Results
Tereos will continue to strengthen its international
sugar distribution network
 To take advantage of world market growth
•
Ramp-up of Tereos Commodities
 France will by far be the 1st european exporter in 2017
•
Acquisition of Napier Brown Sugar, 3rd in United-Kingdom
– page 35 –
2014/15 Full Year Results
Ramp-up of our investments in growing
emerging markets
Palmital, Brazil
 Ramp-up of production
 Development of product range
Cilegon, Indonesia
 Significant growth potential for the
industrial site
 Production and marketing of
maltodextrines in 2015
 New product portfolio expansion in
2016
Dongguan, China
 Ramp-up of production in 2015
– page 36 –
Tieling, China
 Launch of glucose syrups in 2015
2014/15 Full Year Results
Further growth potential through innovation
 R&D project with Michelin to develop tires
out of biomass
 Installation in Bucy-Le-Long of an industrial
prototype for Futurol project (2nd generation
biofuel)
 Avantium: common study for a first bioplastic
industrial production unit
 Vegetal proteins: a sector with a future
 Tereos, 2nd world producer of wheat
protein
 Winner of the Worldwide Innovation
Challenge with G en Vie project
– page 37 –
2014/15 Full Year Results