Tereos Group Investor presentation February 2018
Disclaimer IMPORTANT: You must read the following before continuing and, in accessing such information, you agree to be bound by the following restrictions. This document was prepared by Tereos (the “Company”) for the sole purpose of its investor presentation held on February 2018. The information contained in this document has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be placed upon, the fairness, completeness or correctness of the information or opinions contained in this document and the Company, as well as its affiliates, directors, advisors, employees and representatives accept no responsibility in this respect. 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 and generally all statements preceded by, followed by or that include the words “believe”, “expect”, “project”, “anticipate”, “seek”, “estimate”, “should”, “could” or similar expressions. 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 are 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 contains information about the Company’s markets, including their size and prospects. Unless otherwise indicated, the information is based on the Company’s estimates and is provided for information purposes only. The Company’s estimates are based on information obtained from third party sources, its customers, its suppliers, trade organisations and other stakeholders in the markets in which the Company operates. The Company cannot guarantee that the data on which its estimates are based are accurate and exhaustive, or that its competitors define the markets in which they operate in the same manner. In this document, references to “Adjusted EBITDA” correspond to the net income (loss) before income taxes, share of profit of associates and joint ventures, net financial income (expense), depreciation and amortization, impairment of goodwill, gain on bargain purchase, and price complements. It is also restated from the change in fair value of financial instruments, of inventories and of sales and purchase commitments except for the portion of these elements related to trading activities, from the change in fair value of biological assets, from non-recurring items (mainly disposals of subsidiaries) and seasonality effect. The seasonality effect corresponds to a timing difference in the recognition of depreciation and price complement between the Guarantor’s Consolidated Financial Statements under IFRS and Guarantor’s management accounts. Adjusted EBITDA is not a financial measure defined by IFRS as a measurement of financial performance and may not be comparable to other similarly-titled indicators used by other companies. Adjusted EBITDA provided as additional information only and should not be considered as a substitute for operating income or net cash provided by operating activities. Percentages included in the following presentation may be calculated on non-rounded figures and therefore may vary from percentages calculated on rounded figures. Page 2
1 2 Tereos overview
Tereos: 3 rd largest sugar producer globally RANKING OF WORLD SUGAR PRODUCTION BY COMPANY* (1 000 TONNES GROSS VALUE - 2016/17) 3 RD 4000 3000 2000 WORLD LARGEST SUGAR GROUP 1000 1 ST 3 RD 4 TH IN FRANCE IN EUROPE IN BRAZIL ALCOHOL & ETHANOL STARCH 3 RD 1 ST IN EUROPE IN EUROPE Page 4 (*) Source : FO Lichts – May 2017
Worldwide footprint Only sugar producer with presence on 3 continents 49 EUROPE Countries: Belgium, Czech Republic, France, Italy, INDUSTRIAL FACILITIES Romania, Spain, UK 32 IN 13 COUNTRIES Raw materials: sugarbeet, wheat, potato, corn, alfalfa INDUSTRIAL FACILITIES ESTABLISHED IN 17 COUNTRIES SALE OFFICES TEREOS COMMODITIES ASIA R&D CENTRES 3 INDUSTRIAL FACILITIES Countries: China, Indonesia Raw materials: wheat, corn LATIN AMERICA 8 INDUSTRIAL FACILITIES Countries: Brazil 6 AFRICA / INDIAN OCEAN Raw materials: sugar cane, corn, cassava INDUSTRIAL FACILITIES Countries: Kenya, Mozambique, Réunion (FR), Tanzania Raw materials: sugar cane Page 5
Diverse and complementary product offering Breakdown of 2016/17 revenue by products 11% Other (of which energy) 6% Sugar (sugarbeet, cane) Proteins 46% 5% €4.8 Bn 53 % Animal nutrition 9% Sweeteners (grains) Starch and other derivatives 8% (grains) 16% Alcohol / Ethanol (sugarbeet, cane, grains) Page 6
Leading global clients Complemented by strong retail brands Blue chip, diversified Recognized retail industrial clients brands For example Food Spirits Soft drinks 2016/17 Group Revenues Others Top 10 clients Others Page 7
Satisfactory 2016/17 performance €4.8 Bn €607 M €508 M Revenues in 16/17 Adjusted EBITDA in 16/17 Cash flow in 16/17 Breakdown by division Breakdown by division Group 1% 3% 508 15% 32% 355 39% 31% 51% 27% 15/16 16/17 Sugar Europe Sugar International Tereos Group Sugar Europe Sugar International Starch & Sweeteners Others (incl. Elim) Starch & Sweeteners Others (incl. Elim) +15% vs. 15/16 +38% vs. 15/16 +€153 M vs. 15/16 +2.1 ppts vs. 15/16 in Adj. EBITDA Margin Page 8
2 Market Update
Expectation of world sugar surplus in 2017/18 After 2 years of deficit Global sugar supply/demand balance 15 195 190 12 Production/Consumption (in Mt) 185 9 Surplus/Deficit (in Mt) 180 6 175 3 170 0 165 2012 2013 2014 2015 2016 2017 2018e -3 160 -6 155 -9 150 Surplus/Deficit World Production World Consumption Source: LMC, January 2018 Page 10
World sugar prices: impacted by expected surplus Historical sugar Historical world sugar prices premium/(discount) over ethanol 25 US$cts/lb High 24 US$23.81cts/lb 23 22 21 20 19 18 17 16 15 14 13 Current 12 US$13.38cts/lb Low 11 US$10.39cts/lb 10 NY#11 (US$Cts/lb) LMC forecasts for NY#11 (US$Cts/lb) Source: Bloomberg, 19 February 2018 Source: CEPEA/ESALQ and Group estimates � 9M average world sugar price (NY#11) down 25% vs. 9M 16/17 � Slight rebound since low point hit in June 17 (+7%) � Brazilian ethanol/sugar parity currently in favor of ethanol � Brazilian millers’ mix decision will be crucial for sugar balance next year � 2019/20 LMC price forecasts (Jan/18): hovering around 15.5 US$cts/lb Page 11
EU: Strong one-time increase in production Liberalization of EU market and favorable weather EU-28 S&D (MT) 16/17 17/18 ≈ 20 Sugar Production 15.9 ≈ 17.5 Sugar Consumption 17.7 ≈ 1 Imports 2.9 ≈ 3.5 Exports 1.4 • Acreage: + 17% (vs. N-1) • Sugar consumption only marginally impacted by isoglucose in the short-term • Sugar Yields (sugar/Ha): + 8% vs. 5-Yr average • Imports reduced significantly � +0.9 MT/Ha • Longer campaigns (+20%) optimizing industrial capacities EU could rank as the largest origin Expected sugar production at ≈ 20MMT for white exports in 2017/18 Source: Tereos Source : Tereos Page 12
Lower EU prices since start of new campaign After favorable H1 Average quota sugar price within the EU 800 €/T 750 700 650 600 550 500 450 400 350 300 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 EU Commission reported price (ex-works, €/T) � Reported average 9M EU quota sugar prices slightly higher than 9M last year, reflecting good conditions in high contractualization period last year � Significant volume increase for this year’s crop � Increased acreage in the EU (+14% 1 ) + favorable weather � Prices lower in 1st year of transition period after end of quota regime � Increased volume of sugar available + current levels of world sugar price (1): Source EU Commission, 6th October, 2017 Page 13
EU: main discrepancies in terms of yield and VCS European Commission forecast of the 2017/18 production and yield/ha (EU 28) and VCS for 2017 Sweden a. 10.8 b. 0.3 Finland a. 6.0 Denmark b. 0.1 a. 12.7 c. 1.0 b. 0.4 Lithuania a. 9.3 b. 0.2 c. 1.4 Poland UK a. 10.1 a. 14.8 Germany b. 2.3 b. 1.4 Czech Rep. a. 13.2 c. 82.0 a. 10.1 b. 5.0 b. 0.6 France c. 16.7 Romania a. 13.2 a. 4.7 Belgium b. 6.0 a. 13.1 b. 0.1 Slovakia c. 18.2 a. 8.6 b. 0.8 b. 0.2 Netherlands c. 8.1 Spain a. 15.0 a. 15.4 (*) Hungary b. 1.3 b. 0.5 a. 9.6 Italy c. 16.8 b. 0.1 Croatia Greece Autriche a. 8.1 c. 8.0 a. 9.3 a. 7.0 a. 10.0 b. 0.3 b. 0.2 b. 0.04 b. 0.4 c. 16.7 c. 2.8 c. 6.8 a = Yield (in t/ha, tonnes white sugar equivalent) / b = production of the campaign (in mt) / c = 2017 VCS (in mEUR) (*) with irrigation Source: (a) and (b) EU Commission, EU Sugar Balance, January 2018 Update, (c) EU Commission, Voluntary Coupled Support, September 2017 Page 14
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