ADJUSTED EBITDA 1 GROWS 45.4% TO R$588 MILLION IN THE QUARTER

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1 ADJUSTED EBITDA 1 GROWS 45.4% TO R$588 MILLION IN THE QUARTER Unit cost decreases 21.6% in (measured by ex-resale Cash COGS) São Paulo, February 8, 2018 Biosev, the world s second largest sugarcane processor, announces its results for the third quarter of the 2017/18 crop year. & HIGHLIGHTS Crushing came to 29.1 million in, in line with ; B3: BSEV3 Stock price on 2/7/2018: R$ 4.32 No. of shares: 219,628,363 Market cap: R$949 million Conference Call in Portuguese with translation into English February 9, :00 a.m. (Brasília - BRST) 8:00 a.m. (U.S. EDT) 1:00 p.m. (London - GMT) Portuguese (11) (11) English: +1 (786) (888) Code: Biosev Replay: (11) Code: Portuguese # English # Investor Relations ri@biosev.com Telephone: (11) Consolidated agricultural yield (TCH) stood at 80.2 ton/ha in, up 0.8%, led by the MS Cluster, where yield grew 5% to 85.1 ton/ha; TCH In the Center South region reached 82.4 ton/ha in, a decrease of 0.6%; Consolidated Cane TRS increased 0.7% to kg/ton in ; TSH (total sugar per hectare) rose 1.6% to 10.6 ton/ha in ; Production volume measured by Product TRS grew 2.8% to 3.8 million tons in ; Net revenue growth for sugar, ethanol and energy was 12%, 12% and 53%, respectively; Unit Cash COGS (ex-resale) fell 21.6% in and 9.3% in, confirming the downward trend observed in 2Q18; Cash SG&A expenses decreased 7.7% in the quarter; Adjusted EBITDA (ex-hacc/resale) amounted to R$588 million in and R$1.3 billion in, with EBITDA Margin of 44.5% and 34.0%, respectively; and R$173 million non-recurring impact in the P&L due to payment of the resources received as a result of favorable decisions in certain lawsuits filed against the Instituto do Açúcar e do Álcool IAA, to the historical Santelisa Vale shareholders, as already announced to the market in a Material Fact. 1 Adjusted EBITDA excludes non-recurring effects in the amount of R$159 million Biosev is the world s second largest sugarcane processor, with 11 agroindustrial units in Brazil. Biosev is controlled by the Louis Dreyfus Group and began operating in the sugar and ethanol industry in 2000, when it acquired its first unit in Brazil. Today its crushing capacity stands at 36.4 million tons/year. Biosev manages 346,000 hectares of land and has surplus biomass power generation capacity of 1,346 GWh. Biosev is listed on the São Paulo Stock Exchange (B3) Novo Mercado and adopts high standards of corporate governance.

2 1. OPERATING PERFORMANCE The following table presents key indicators for operating efficiency and productivity, which are analyzed in this section: Efficiency and Productivity % % Crushing ('000 tons) 6,400 7, % 29,101 29, % Own 4,484 5, % 17,925 18, % Third Parties 1,915 2, % 11,176 11, % TCH - Agricultural yield (ton/ha)* % % Sugarcane TRS (kg/ton) % % TSH (Kg/ha)** % % * Own cane only ** Total Sugar per Hectare: Calculated as the product of TCH and Sugarcane TRS 1.1 Crushing Biosev crushed 29.1 million tons in, virtually in line with the same period last crop year, with crushing affected by the smaller area harvested due to the higher rainfall in Brazil's Center-South region in the period. This effect was partially offset by the increase in TCH. At the Ribeirão Preto (RP) Cluster, crushing in was 15.8 million tons, up 1.6%. This performance reflects the 4.0% growth in the harvested area, which was partially offset by the 1.9% drop in TCH. At the Mato Grosso do Sul (MS) Cluster, crushing volume was 7.3 million tons in, in line with. At the Leme (L) and Lagoa da Prata (LP) Clusters, combined crushing amounted to 4.0 million tons in, representing a decrease of 12.9% compared to, This performance is explained by the 8.3% decline in average yield measured by TCH and by the 5.8% contraction in the harvested area. In, Biosev s consolidated crushing amounted to 6.4 million tons, down 18.7% from. The lower crushing volume in the quarter is associated with Company s planning for agricultural activities, which provides for a resumption of crushing operations in March, and with the effects from higher rainfall at the MS Cluster. 2

3 The following charts show the evolution in crushing volume on a consolidated basis and at the RP and MS Clusters: Crushing Volume ('000) Consolidated -0.1% 29,131 29,101 Ribeirão Preto 1.6% 15,542 15,798 Mato Grosso do Sul -0.4% 7,300 7,271 Consolidated Ribeirão Preto Mato Grosso do Sul 7, % 6, % 3,664 3,398 2, % 1,454 3

4 1.2 Productivity Tons of Cane per Hectare (TCH) In, the yield of sugarcane fields measured by TCH was 80.2 ton/ha, up 0.8%, led by the improvements implemented in the cane fields management, which include: (i) disciplined execution of the plan to adjust the sugarcane varietal profile; (ii) adoption of enhanced agricultural practices, including the use of liquid and foliar fertilization, ferti-irrigation and the modification of processes and equipment to optimize mechanized harvesting and reduce trampling; and (iii) more intensive use of agricultural technologies. An important factor in this result was the 5.2% improvement in yield at the MS Cluster, to 85.1 kg/ton in. In the first nine months of the crop year, TCH at the RP Cluster decreased by 1.9% to 81.7 ton/ha. Yield at the cluster was affected by the lower precipitation in January to March (crop development period) compared to the same period of the previous crop year. In, consolidated yield stood at 70.7 ton/ha, decreasing 3.7% from, mainly impacted by the 8.3% decline in the RP Cluster to 70.1 ton/ha, due to the effects from the unfavorable weather conditions mentioned above. The result was partially offset by the higher yields at the MS and NE Clusters. A highlight was the improvement in TSH (tons of sugar per hectare), which reached 10.6 ton/ha, up 1.6% from. In the quarter, TSH stood at 9.6 ton/ha, down 2.3%, impacted by the decrease in TCH. 4

5 The following charts show the evolution in TCH on a consolidated basis and at the RP and MS clusters: TCH (ton/ha) Consolidated Ribeirão Preto Mato Grosso do Sul 0.8% % % 85.1 Consolidated Ribeirão Preto Mato Grosso do Sul -3.7% % % The following charts show the evolution in consolidated TSH: TSH (ton/ha) TSH (ton of sugar/ha) TSH (ton of sugar/ha) -2.3% 1.6%

6 Note that Biosev is implementing a new planting model that will utilize, in planting operations, the same workforce used in harvesting and treatment operations. Sugarcane planting in Brazil's Center-South region now will be concentrated systematically in the months from December to March. Furthermore, improvements made to the agricultural area over the past few years have helped to create newer cane fields with greater longevity, which will enable Biosev to reduce its plantation renewal rate over the coming crop year. The goal of this new model s implementation is to reduce planting costs (CAPEX) and consequently improve the Company s cost competitiveness. 6

7 1.2.2 Cane Total Recoverable Sugar (TRS) Cane TRS content was kg/ton in, increasing 0.7% from the same period a year ago, which mainly reflects the improvements in cane fields management and adjustments to the varietal profile, combined with weather conditions that favored the increase in sugar content at the RP Cluster. At the RP Cluster, Cane TRS grew 2.6% in comparison with, to kg/ton. At the MS Cluster, Cane TRS was kg/ton, down 1.2% on the year-ago period, affected by the 26% higher precipitation levels this crop year. In compared to, consolidated Cane TRS advanced 1.5% to kg/ton. At the RP Cluster, Cane TRS in the quarter was kg/ton, up 6.3%, reflecting the aforementioned measures and the more favorable weather conditions. At the MS Cluster, Cane TRS stood at kg/ton in, down 10.2% compared to, reflecting the effects from higher rainfall in the period. The following charts show the change in TRS content between crop years: Sugarcane TRS (kg/ton) Consolidated 0.7% Ribeirão Preto % Mato Grosso do Sul -1.2% Consolidated Ribeirão Preto Mato Grosso do Sul 1.5% % %

8 1.2.3 Agricultural Technology Biosev has intensified the use of enhanced agricultural practices to improve the productivity, longevity and quality of its sugarcane plantations. The use of new technology is crucial to improving on current productivity levels. In this light, Biosev has invested, for example, in precision agricultural, using UAVs to map faults and replanting, using software and systems in all agricultural processes and adopting drip irrigation at the NE Cluster, among other initiatives. Updating the varietal profile is one of priorities of the agricultural area. Modern varieties are more productive, richer and better adapted to mechanized harvesting. Biosev uses pre-sprouted seedlings to form its nurseries, including through intercropping, with the possibility of rotating the crops between the seedling lines. This is an important tool for increasing soil fertility and reducing logistics costs with seedling transportation. All planters use autopilot systems and all planting lines are mapped and used to guide equipment during treatment and harvesting operations. Biosev also uses automated planters that dose the optimal number of seedlings for better distribution, which reduces planting errors and ensures a better final stand with more plants per hectare, which is critical for the plantation s productivity and longevity. Another example of the good agricultural practices adopted by the Company is the substitution of mineral fertilizers for industry byproducts, such as filter cake and vinasse. All Biosev units have composting yards for solid byproducts (cake, ash and soot), where the materials are optimized for use as fertilizers on the plantations. Meanwhile, the vinasse is transported directly to the fields via pipelines and trucks, where it is applied to substitute mineral fertilizers. The use of solid or liquid fertilizers, whether on areas with exclusively mineral fertilization or where fertilization is complemented by filter cake or vinasse, is important for leveraging production and quality. The application of nutrients in optimal formulations, at the right dosages and right times for best absorption by plants, helps to sustain the productivity of the sugarcane plantations. Aerial foliar fertilization, applied during spring and summer, increase the absorption of nutrients and reduce fertilization costs. Biological pest control and the use of selective and systemic products form the foundation of the Company s phytosanitary efforts. At the RP Cluster, the Company adopts mathematical modeling to guide the identification and control of the sugarcane borer based on environmental, weather, varietal and management characteristics, which reduces the use of pesticides, costs and environmental risks. This practice will be rolled out to other units and for other pests. During harvest operations, 100% of harvesters in the Center-South operate using autopilot and onboard computers, thereby reducing the trampling of cane lines and the removal of ratoons. Biosev also has Agricultural Operation Centers (COAs) in place at its agro industrial units, which monitor the operational and quality indicators of all agricultural activities. 8

9 1.3 Production The following table shows production volume and the production mix: Production % % Sugar Mix (%) 39.8% 47.8% -8 p.p. 49.0% 51.3% -2,3 p.p. Anhydrous Mix (%) 18.9% 28.3% -9,4 p.p. 31.6% 36.3% -4,7 p.p. Production ('000 tons of TRS Product)* 855 1, % 3,799 3, % Sugar ('000 tons) % 1,781 1, % Ethanol ('000 m³) % 1,140 1, % Cogeneration (GWh) % % *It considers the conversion factors applied in São Paulo State, published in Consecana Manual Product TRS Production in terms of tons of Product TRS came to 3,799 thousand tons in, up 2.8%. The increase is explained primarily by the 0.7% increase in Cane TRS and by industrial efficiency gains. In, production in terms of Product TRS came to 855,000 tons, down 14.9% from. Performance in the quarter was adversely affected by the 18.7% reduction in crushing volume, which was partially offset by the 1.5% growth in Cane TRS. In, the share of sugar in the production mix decreased compared to the previous crop year, due to the higher volume of TRS allocated to ethanol production because of its higher profitability compared to sugar. In, anhydrous ethanol accounted for 31.6% of total ethanol production, down 4.7 p.p. from the previous crop year, due to the product's lower relative profitability compared to hydrous ethanol and energy cogeneration. In the quarter, anhydrous ethanol accounted for 18.9% of total ethanol production, down 9.4 p.p. from, due to the aforementioned factors. 9

10 1.3.2 Cogeneration Biosev has cogeneration power plants at all 11 of its industrial sites and is energy self-sufficient during the harvest period. Of these units, nine produce surplus electricity for sale. Cogeneration destined for sale in grew 2.2% to 802 GWh. This growth was basically driven by the higher crushing volume at the units that produce surplus energy for sale and by the processing of outside biomass. The productivity of cogeneration units measured in kwh of power sold per ton of cane crushed 2 stood at 31.3 kwh/ton in, up 0.6% from the same period last crop year. This higher productivity is due to the higher operational reliability combined with the implementation of process improvements. In, cogeneration for sale stood at 174 GWh, down 23.7%, mainly due to the lower crushing volume and lower productivity of cogeneration units. The following charts show a comparison of cogeneration for sale and productivity between the periods on consolidated basis and for the RP and MS Clusters: Cogeneration for Sale Consolidated Ribeirão Preto Mato Grosso do Sul % % % Consolidated Ribeirão Preto Mato Grosso do Sul % % % Cogen for sale (GWh) Cogen for sale - Outsourced biomass (GWh) Cogen for sale/crushing (kwh/ton) 2 This productivity indicator excludes crushing volume from mills that do not export energy and the amounts of outside biomass. 10

11 2. ECONOMIC AND FINANCIAL PERFORMANCE 2.1 Net Revenue In, net revenue excluding the non-cash effects from the hedge accounting of foreigndenominated debt (HACC) amounted to R$5.3 billion, down 3.9% compared to. The result is mainly due to the lower revenue from commodity export performance contracts, which more than neutralized the higher revenue from sugar, ethanol and energy sales. In, net revenue amounted to R$1.5 billion, down 1.0% from. The higher revenue from sugar, ethanol and energy, which grew 2.6%, 26.2% and 40.7%, respectively, was partially neutralized by the lower revenue from other products (dry yeast, powdered molasses, raw and hydrolyzed bagasse) and from commodity export performance contracts. Note that Biosev s net revenue also includes, in addition to revenue from sales of sugar, ethanol, energy cogeneration and the byproducts of sugar and ethanol production from its industrial units revenue from the resale of finished products, such as: (i) sugar, ethanol and energy; and (ii) other commodities, which are required to comply with export performance contracts associated with obligations denominated in foreign currency. The following table presents a breakdown of net revenue ex-hacc: Net Revenue ex-hacc (R$ Thousand) % % Sugar 835, , % 2,751,771 2,451, % Domestic Market 117, , % 286, , % Export Market 717, , % 2,464,970 1,967, % Ethanol 597, , % 1,502,977 1,342, % Domestic Market 596, , % 1,394,931 1,180, % Export Market , , % Energy 92,054 65, % 281, , % Other Products 16, , % 789,317 1,561, % Dry yeast, molasses and bagasse 16,582 30, % 46,353 74, % Export performance contracts - 172, ,964 1,487, % Total 1,540,979 1,555, % 5,325,484 5,539, % Revenue from resale operations is detailed in the following table: Resale operations (R$ Thousand) % % Sugar, ethanol and energy* ,3% ,0% Export performance contracts ,0% ,0% Total ,0% ,7% * Revenue from sugar, ethanol and energy resale transactions are accounted in each of the corresponding product lines in the Net Revenue ex-hacc table above Excluding the effects from the export performance contracts, Biosev posted net revenue of R$4.6 billion in, up 13.1% compared to. In, on the same basis, net revenue amounted to R$1.5 billion, growing 11.4% on. 11

12 The following charts present a breakdown of net revenue by product, excluding the effects from hedge accounting (HACC) and revenue from export performance contracts. Note the higher share of energy sales in Biosev s total revenue and the lower share of other products: Net Revenue by Product (%) 4.5% 1.8% 6.1% 1.0% 33.1% 32.8% 60.0% 60.5% The following charts present a breakdown of net revenue by market, excluding the effects from hedge accounting (HACC) and revenue from export performance contracts. Note the lower share of domestic revenue in Biosev s total revenue, reflecting the decision to prioritize sales of VHP sugar, which is mainly exported, over sales of crystal sugar: Net Revenue by Market (%) 52.5% 47.5% 56.1% 43.9% The following table presents the sugar and ethanol inventory position at the end of the respective periods: Inventories 6M18 Sugar ('000 tons) Ethanol ('000 m 3 )

13 2.1.1 Sugar In, net revenue from sugar sales excluding the non-cash effects from the hedge accounting of foreign-denominated debt (HACC) amounted to R$2.8 billion, advancing 12.2% compared to. The result primarily reflects the sales volume growth of 11.1%, driven by 25% growth in export volumes, combined with the 1.0% increase in average price in the period. In, net revenue from sugar sales amounted to R$835 million, increasing 2.6% from. The performance was mainly due to the 1.6% increase in the average price and 1.0% growth in sales volume. The following charts present the evolution in net revenue and a comparison of sugar volumes and average prices, excluding the non-cash effects from the hedge accounting of foreign-denominated debt: Net Revenue (R$ million) Volume ( 000 tons) and Average Price (R$/ton) 2,752 1, % 1,268 2, % 1, % 2,170 1,967 2,465 1,643 1, % 1,274 1, % %

14 The following charts present the breakdown of revenue by type of sugar, excluding the non-cash effects from the hedge accounting of foreign-denominated debt (HACC). Note that the shift in the product mix reflects Biosev s decision to focus the Santa Elisa and Lagoa da Prata units on VHP production, which consequently reduced the production of crystal sugar. The decision was taken to maximize cash flow and operating results by reducing production bottlenecks and costs and by increasing efficiency gains: Revenue by Sugar Type (%) 3.3% 5.9% 3.9% 2.4% 4.0% 18.2% 72.6% 89.8% 14

15 2.1.2 Ethanol In, net revenue from ethanol sales, excluding the non-cash impacts from the hedge accounting of foreign-denominated debt (HACC), came to R$1.5 billion, growing 12.0% from. The figure reflects the 23.2% increase in sales volume, which was partially offset by the 9.2% decrease in average price. The reduction in the average sales price for ethanol is due to the (i) lower market prices for hydrous and anhydrous ethanol in comparison with the same period of the last crop year, (ii) the termination of PIS/COFINS tax credits of R$120/m 3 on ethanol sales and (iii) the smaller share of anhydrous ethanol in the sales mix. Meanwhile, the sales volume growth of 23.2% is due to the higher share of ethanol in the production mix, which is explained by the product s higher profitability in relation to sugar. In, net revenue from ethanol sales was R$597 million, up 26.2% from, reflecting the 50.8% growth in sales volume, which was partially offset by the 16.4% drop in the average price, due to the aforementioned reasons. It is worth mentioning that Biosev has obtained the license to import ethanol, free of tariff, within the quota established by the Brazilian government in September It is important to note the positive trend in ethanol prices over the course of, as shown in the following chart, which validates Biosev s inventory-carryover strategy. Hydrous and Anhydrous Ethanol Average Prices (R$/m³) Source: Bloomberg, December

16 The following charts present the evolution in net revenue and a comparison of ethanol volumes and average prices, excluding the non-cash effects from the hedge accounting of foreign-denominated debt: Revenue (R$ million) Sales Volume ('000 m³) & Average Sales Price (R$/m³) 1, , , % 1,586 1, % 1, % , % 1, % % The following charts present a breakdown of revenue by type of ethanol, excluding the non-cash effects from the hedge accounting of foreign-denominated debt (HACC): Revenue by Ethanol Type (%) 7.3% 5.5% 42.5% 50.2% 39.1% 55.5% 16

17 2.1.3 Energy In, net revenue from energy sales grew 53.1% to R$281 million, basically due to the 45.9% increase in average price, which was driven by the higher spot price (PLD) following the decline in reservoir levels in Brazil's Center-South. In, net revenue from energy sales came to R$92 million, up 40.7%, primarily reflecting the higher average sales price, which was partially offset by the lower sales volume. The following charts present the evolution in net revenue and a comparison of energy volumes and average prices: Net Revenue (R$ million) Volume (GWh) & Average Sales Price (R$/MWh) % % % 1,249 1, % % % T17 3T18 3T17 3T18 17

18 2.1.4 Other Products The line Other Products records revenue from sales of dry yeast, powdered molasses, raw and hydrolyzed bagasse for animal feed, in addition to revenue from the sale of commodities in the spot market to fulfill export performance contracts with the aim of settling obligations in foreign currency. In, revenue from other products amounted to R$789 million, compared to revenue of R$1.6 billion in. The reduction of 49.5% is mainly related to the reduced execution of export performance contracts associated with the settlement of foreign-denominated debt. 18

19 2.2 Cost of Goods Sold (COGS) Biosev recorded a reduction in costs compared to both the third quarter and the first nine months of the previous crop year. Unit cash COGS ex-resale decreased 21.6% in the quarter and 9.3% in the ninemonth period, as shown below: Cash COGS ex-resale (R$/Ton TRS sold) -21.6% Cash COGS ex-resale (R$/Ton TRS sold) -9.3% As per the total cash COGS ex-resale, it decreased 6.0% in the quarter and 2.0% in. This improvement reflects the reduction of operating costs, as a result of the on-going process to optimize costs and streamline organizational structures. Such cost reduction more than offset the impact of increased volumes in the COGS as shown in the graph below. Note that the increase in Personnel costs is related to the termination of temporary agricultural workers due to the start of the intercrop period, which is a recurring event in the industry and that, in the 2017/18 crop year, occurred in December. In the previous crop year, this event occurred in January. An important factor was the non-recurring expenses under COGS, which is mainly due to the severance costs in, of R$13 million, associated with the ongoing streamlining of organizational structures. Excluding these non-recurring expenses, cash COGS ex-resale amounted to R$2.0 billion, down 2.6% from the same period last crop year. The following chart presents the evolution in cash COGS ex-resale between quarters, which shows the effects from volume, unit cost and non-recurring effects: Cash COGS ex-resale (R$MM) -2.0% -2.6% ,028 1,987 1,974 Cash COGS Volume Effect Unitary Effect Cash COGS Non recurring Cash COGS 19

20 The following tables present a breakdown of total COGS and cash COGS: COGS and Cash COGS (R$ Thousand) % % Total COGS (1,155,374) (1,307,104) -11.6% (4,597,261) (4,708,058) -2.4% Non cash items (295,938) (267,689) 10.6% (1,057,094) (689,884) 53.2% Depreciation and Amortization (376,701) (364,011) 3.5% (1,096,736) (989,449) 10.8% Gains (losses) from changes in the Fair Value minus estimated costs to sell Biological Assets 80,763 96, % 39, ,565 - Cash COGS (859,436) (1,039,415) -17.3% (3,540,167) (4,018,174) -11.9% Personnel (162,370) (124,173) 30.8% (462,599) (355,203) 30.2% Raw Materials (cane, land lease and HLT) (427,458) (485,072) -11.9% (1,397,160) (1,492,250) -6.4% Inputs (34,700) (55,144) -37.1% (126,934) (180,136) -29.5% Resale goods (234,908) (375,026) -37.4% (1,553,474) (1,990,585) -22.0% Sugar, ethanol and energy (234,908) (203,261) 15.6% (789,514) (493,128) 60.1% Export performance contracts - (171,765) 0.0% (763,960) (1,497,457) -49.0% Cash COGS ex-resale (624,528) (664,389) -6.0% (1,986,693) (2,027,589) -2.0% Cash COGS ex-resale (R$ Thousand) % % Agricultural (533,841) (567,197) -5.9% (1,704,197) (1,727,293) -1.3% HLT (own + 3rd party cane) (203,147) (176,525) 15.1% (605,186) (556,083) 8.8% Land lease (119,877) (129,202) -7.2% (364,825) (341,315) 6.9% 3rd party cane (210,817) (261,470) -19.4% (734,185) (829,895) -11.5% Industrial (80,179) (95,637) -16.2% (238,257) (280,870) -15.2% Other (10,508) (1,554) 576.1% (44,239) (19,425) 127.7% Cash COGS ex-resale (624,528) (664,388) -6.0% (1,986,693) (2,027,588) -2.0% TRS Product sold ex-resale ('000 tons) 1, % 3,267 3, % Cash COGS ex-resale (R$/Ton) (545) (695) -21.6% (608) (671) -9.3% 20

21 2.3 Selling, General and Administrative (SG&A) Expenses In, SG&A expenses amounted to R$490 million, increasing 2.7% from. Selling expenses came to R$245 million, increasing 5.1% from the same period last crop year. The main factor in this variation was the increase in logistics expenses associated with the higher share of exports in the sales mix. General and administrative expenses were R$245 million, practically in line with the prior-year period. In, SG&A expenses amounted to R$129 million, down 7.7% from the same period of the prior crop year, mainly due to the 17.0% reduction in G&A expenses. It is important to note the recognition of R$1.5 million in and of R$3.6 million in in nonrecurring items related to severance payments as part of the ongoing process to streamline operating and organizational structures, which includes reducing headcount. The following table presents a comparison of SG&A expenses between periods: SG&A (R$ Thousand) % % Selling (63,999) (61,307) 4.4% (244,641) (232,713) 5.1% Freight (46,212) (40,271) 14.8% (170,132) (156,239) 8.9% Shipping Charges (14,955) (16,559) -9.7% (64,137) (62,805) 2.1% Commissions, wharfage and other (2,832) (4,477) -36.7% (10,372) (13,669) -24.1% G&A (65,396) (78,832) -17.0% (244,916) (243,885) 0.4% Personnel (32,517) (36,473) -10.8% (116,304) (121,659) -4.4% Services (25,581) (34,227) -25.3% (105,450) (98,881) 6.6% Other (7,298) (8,132) -10.3% (23,162) (23,345) -0.8% SG&A (Cash) (129,395) (140,139) -7.7% (489,557) (476,598) 2.7% Depreciation expenses allocated as SG&A amounted to R$18.5 million in and to R$6.0 million in, compared to R$21.3 million and R$6.8 million in and, respectively. 21

22 2.4 EBITDA Biosev posted gross margin increase in comparison with both the same quarter and nine-month periods of the previous crop year. In, gross margin improved from 42.9% to 47.2%, while in it improved from 43.9% to 52.7%. These margin gains were obtained because of the higher sales volume and lower costs mentioned above: Gross Margin ex-resale / HACC (%) and Cash COGS/Net Revenue (%) 43.9% 52.7% 42.9% 47.2% -8.8 p.p p.p. 56.1% 47.3% 57.1% 52.8% Cash COGS / Net Revenue (%) Gross Margin (%) Adjusted EBITDA (including resale/hacc) came to R$1.1 billion, increasing 11.5% from. In, adjusted EBITDA (including resale/hacc) came to R$567 million, up 43.3% compared to. To ensure a more accurate analysis of Biosev s operating profitability, we excluded from the calculation of adjusted EBITDA (3)(4) the effects from resale operations, including the performance of export performance contracts, and the non-cash effects from the hedge accounting (HACC) of foreigndenominated debt on net revenue. Furthermore, especially in, a substantial volume of non-recurring items were recognized, in the amount of R$158.8 million, totaling R$171.9 million in. These costs are mainly associated with the expenses of R$138 million, incurred from the Company s ongoing operational and administrative restructuring and from the settlement of obligations with legacy shareholders from Santelisa Vale, as already announced by Biosev in a material fact notice. Accordingly, and as shown in the following chart, adjusted EBITDA ex-resale/hacc, and excluding the non-recurring effects of the period, came to R$1.3 billion in, advancing 18.5% on. Adjusted EBITDA margin (ex-resale/hacc) in the period was 34.0%, expanding 3.6 p.p. compared to. 3 EBITDA corresponds to earnings before net financial income (expenses); depreciation, amortization and depletion; and income and social contribution taxes on net income for the period. Among other metrics, we use EBITDA as a measure of our operating performance and operating cash flow generation. Adjusted EBITDA is calculated based on EBITDA (CVM Instruction 527), excluding non-recurring items. 4 EBITDA is not a measure of financial performance in accordance with the accounting practices adopted in Brazil (BR GAAP, IFRS) and should not be considered as an alternative to net income, as an indicator of operating performance, as an alternative for operating cash flow or as a measure of liquidity. EBITDA does not consider certain costs, which could significantly affect our profits, such as financial expenses, taxes, depreciation and amortization, thus limiting its use as a measure of our profitability. 22

23 In, adjusted EBITDA ex-resale/hacc, excluding the non-recurring effects of the period, was R$588 million, growing 45.4% on the year-ago period. Adjusted EBITDA margin ex-resale/hacc stood at 44.5%, increasing 10.4 p.p. from the same period last crop year. The following charts show the change in adjusted EBITDA ex-resale/hacc and EBITDA margin between periods: Adjusted EBITDA ex-resale/hacc (R$ million) and EBITDA Margin (%) 34.1% 44.5% 30.4% 34.0% 45.4% 18.5% ,079 1,279 Adjusted EBITDA ex-resale/hacc Adjusted EBITDA margin ex-resale/hacc The following table presents breakdowns of Adjusted EBITDA and Adjusted EBITDA ex-resale/hacc: EBITDA Composition (R$ Thousand) % % Net Revenue 1,535,433 1,550, % 5,147,716 5,452, % Cash COGS (859,436) (1,039,415) -17.3% (3,540,167) (4,018,174) -11.9% Gross Profit (Cash) 675, , % 1,607,549 1,434, % SG&A (Cash) (129,395) (140,139) -7.7% (489,557) (476,598) 2.7% TEAG Profit/(Loss)¹ (120) 1,731-2,905 1, % Other Operating Revenue/Expenses (138,192) 23,138 - (185,409) 35,124 - Non-recurring items 158,771 (142) - 171,874 (1,448) - Adjusted EBITDA 567, , % 1,107, , % Adjusted EBITDA Margin 36.9% 25.5% 11.4 p.p. 21.5% 18.2% 3.3 p.p. Resale effect² 15,438 3,306 - (6,468) (736) - HACC effect³ 5,546 5, % 177,768 86, % EBITDA ex-resale/hacc 588, , % 1,278,662 1,078, % EBITDA Margin ex-resale/hacc 44.5% 34.1% 10.4 p.p. 34.0% 30.4% 3.6 p.p. 1 - Equivalent to 50% of TEAG's shareholding position 2 - Excludes the effects from resale operations of sugar, ethanol, energy and exports performance contracts 3 - Excludes the impact from hedge accounting (HACC) of foreign currency debt on net revenue (non-cash impact) 23

24 The following table presents a reconciliation of Adjusted EBITDA with the Income Statement in the Periods: EBITDA Reconciliation (R$ Thousand) % % NET INCOME (LOSS) (278,686) 42,787 - (823,141) (287,002) 186.8% Income Tax and Social Contribution (57,117) (91,777) -37.8% (201,519) 187,813 - Financial result 440, , % 878, , % Depreciation and Amortization 382, , % 1,115,230 1,010, % EBITDA CVM , , % 968,831 1,287, % Losses (gains) from changes in the Fair Value minus estimated costs to sell Biological Assets (80,763) (96,322) -16.2% (39,642) (299,565) -86.8% Amortization of Concession - TEAG 2,100 2,100-6,299 6,299 - Non-recurring items 158,771 (142) - 171,874 (1,448) - Adjusted EBITDA 567, , % 1,107, , % Adjusted EBITDA Margin 36.9% 25.5% 11.4 p.p. 21.5% 18.2% 3.3 p.p. 24

25 2.5 Hedge The following table shows the aggregate position of our hedged sugar volumes and prices via derivative commodity and foreign exchange contracts on December 31, Hedge on 12/31/ / /19 Sugar (#NY11) Volume ('000 tons) 1, Average Price (cus$/lb) FX (US$) Amount (US$ million) Average Price (R$/US$) Hedged Price (cr$/lb) The volume hedged of 815,000 tons accounts for 62% of Biosev s exposure for the 2018/19 crop year. Note that, adding up the 4.2% Brazilian VHP polarization premium to the average prices shown above, Biosev s hedged prices amounted to cr$/lb. Note that prices in the above table do not include this polarization adjustment. 2.6 Financial Result In, the net financial result was an expense of R$878 million, compared to an expense of R$376 million in the same period last crop year. Excluding the effects from exchange variation, the net financial result in was an expense of R$635 million, down 1.8% from the prior-year period, mainly due to the lower losses from the mark-tomarket and settlement of derivative operations, which were partially offset by higher interest expenses. In, Biosev recorded a net financial loss of R$440 million, compared to a net financial loss of R$168 million in. This result was heavily affected by the depreciation in the Brazilian real against the U.S. dollar in the period, amounting to R$238 million. Excluding the effects from exchange variation, the net financial result in was an expense of R$203 million, increasing 35.0% from the previous crop year, mainly due to higher interest expenses. It is worth mentioning that this result was impacted by interest expenses from the settlement of obligations with legacy shareholders from Santelisa Vale, in the amount of R$35 million. At December 31, 2017, the U.S. dollar exchange rate was R$3.3080/US$. 25

26 The following table shows the changes in the financial result between periods: Financial Result (R$ Thousand) % % Financial Result, net (440,008) (168,257) 161.5% (878,261) (376,085) 133.5% FX Variation (237,395) (18,148) - (243,469) 270,433 - Financial Result before FX (202,613) (150,109) 35.0% (634,792) (646,518) -1.8% Interest Expenses (208,089) (162,220) 28.3% (643,245) (515,739) 24.7% Income from Short-term Investments 5,416 8, % 18,564 26, % Derivative transactions 867 4,086 - (3,843) (169,737) -97.7% Other Revenues/(Expenses) (807) (493) 63.7% (6,268) 12, Earnings Before Taxes (EBT) Earnings before provision for income and social contribution taxes (EBT) amounted to negative R$1,025 million in, compared to negative R$99 million in the same period of the previous crop year. In addition to the aspects discussed above, the variation in EBT is explained by the reduction of R$260 million in the fair value of biological assets less their estimated selling costs between the periods and by the increase in depreciation/amortization of R$104 million. The increase in depreciation/amortization is mainly explained by the higher investments in planting and crop treatments in recent crop years. In, earnings before provision for income and social contribution taxes was negative R$336 million, compared to negative R$49 million in. 2.8 Net Income/Loss In, Biosev posted a net loss of R$823 million, compared to a net loss of R$287 million in. In addition to the aforementioned factors, the result of the period was positively impacted by deferred Income and Social Contribution taxes in the amount of R$202 million. This effect is mainly due to the variation in taxable temporary differences in the period related to unrealized foreign exchange variation and the mark-to-market adjustment of derivative positions. In, Biosev recorded a net loss of R$279 million, compared to net income of R$43 million in the same period of the previous year. In addition to the aforementioned factors, the result of the period was positively impacted by deferred Income and Social Contribution taxes in the amount of R$57 million due to the variation in taxable temporary differences in the period related to unrealized foreign exchange variation and the mark-to-market adjustment of derivative positions. 26

27 3. CAPITAL EXPENDITURE Biosev implemented a new planting model that will utilize, in planting operations, the same workforce used in harvesting and treatment activities. In Brazil's Center-South region, sugarcane is now planted between December and March. Improvements made to the agricultural area over the past few years have helped to create newer cane fields with greater longevity, which will enable Biosev to reduce its plantation renewal rate over the coming crop years. The goal of this new model is to reduce planting costs (CAPEX) and consequently improve the Company s cost competitiveness. Capital expenditures in amounted to R$733 million, down 13.5% from the same period of the previous crop year. Investments in operations in the period came to R$555 million, down 21.4% from. The performance is mainly due to the reduction in expenditures with planting, consistent with the new planting model explained above. Note that the result in was impacted by R$9 million in nonrecurring costs incurred from the ongoing streamlining of the company s operational and organizational structures. The following table presents a breakdown of capital expenditures: Capex (R$ Thousand) % % Expansion 504 7, % 3,448 16, % Operations 159, , % 554, , % Industrial 20,944 26, % 69,666 66, % Agriculture 159 4, % 11,325 13, % Planting 19,292 96, % 111, , % Treatment 118, , % 356, , % Other 1,000 5, % 5,431 22, % Intercrop deferred costs 120,396 64, % 174, , % CAPEX 280, , % 732, , % Non-recurring items (709) - - (9,374) - - Recurring CAPEX 280, , % 723, , % 27

28 4. ADJUSTED EBITDA MINUS CAPEX Biosev posted an evolution in the Adjusted EBITDA minus CAPEX indicator in the quarter and in the year-to-date as shown in the graph below: Adjusted EBITDA - CAPEX (R$ million) 342% 139%

29 5. INDEBTEDNESS Biosev s gross debt stood at R$5.4 billion at the end of, virtually in line with the previous quarter. Such position is explained by the net amortizations in the amount of R$219 million, which was offset by the effects from the 4.4% depreciation in the BRL against the USD on the dollar-denominated portion of liabilities, in the amount of R$183 million. Net debt stood at R$5.0 billion, increasing 2.3% from the balance at end-2q18, mainly due to the aforementioned factors. The following table presents a breakdown of the debt position: Debt (R$ Million) 12/31/ /30/2017 Var. % Gross Debt (5,453) (5,432) 0.4% Short Term (2,098) (2,126) -1.3% Long Term (3,355) (3,306) 1.5% Cash and Short-term Investments % Net Debt (5,046) (4,934) 2.3% Net Debt/Adjusted EBITDA 3.4x 3.8x 29

30 The following charts present a breakdown of debt by index and instrument on December 31, 2017, as well as the cash position by currency: Gross Debt by Instrument and Index (%) Cash and ST Investments by Currency (%) 1.8% 0.6% 8.5% 8.0% 35.6% 18.9% 0.1% 30.8% 10.2% 37.1% 9.1% 70.3% 69.2% BNDES/FCO/FNE Reestructed Debt Export Pre Payment ACC Other NCE USD = 78.9% LIBOR Fixed CDI TJLP Other BRL USD The following chart shows our cash position and debt amortization schedule: Cash and Amortization Schedule (R$ million) 1,863 2, Cash 1,239 1, / / / / /28 BRL USD 30

31 6. CAPITAL MARKETS AND INVESTOR RELATIONS The following chart presents the Company s stock performance in the last 12 months in comparison with the Bovespa Index, as well as the stock s liquidity: Performance BSEV3 vs. IBOV 150% 100% Market value: R$1.0 billion Nº of shares: 219,628,363 5,000 4,000 50% 0% -50% 76, % % 3,000 2,000 1, % dez-16 jan-17 fev-17 mar-17 abr-17 mai-17 jun-17 jul-17 ago-17 set-17 out-17 nov-17 0 Financial Traded Volume (R$ thousand) IBOV BSEV3 Source: Bloomberg, December 31, GUIDANCE Biosev confirms its guidance already given to the market, as shown in the following table: 2017/18 Crop year Guidance Crushing (Million tons) Sugarcane TRS (kg/ton) Total TRS (Million tons)* CAPEX (R$ Million) 1,250 +/- 90 *Total TRS is the product of crushing volume by sugarcane TRS 31

32 7. APPENDICES SUMMARIZED FINANCIAL STATEMENTS 7.1 INCOME STATEMENT Income Statement (R$ Thousand) % % Gross Revenue 1,675,900 1,630, % 5,482,138 5,669, % Taxes and Sales Deductions (140,467) (80,144) 75.3% (334,422) (216,773) 54.3% Net Revenue 1,535,433 1,550, % 5,147,716 5,452, % COGS (1,155,374) (1,307,104) -11.6% (4,597,261) (4,708,058) -2.4% GROSS PROFIT 380, , % 550, , % OPERATING INCOME (EXPENSES) (275,854) (124,162) 122.2% (696,854) (467,802) 49.0% G&A (71,443) (85,624) -16.6% (263,410) (265,202) -0.7% Selling (63,999) (61,307) 4.4% (244,641) (232,713) 5.1% Equity income/(loss) in subsidiaries (2,220) (369) - (3,394) (5,011) -32.3% Other operating income (expenses) (138,192) 23,138 - (185,409) 35,124 - Financial Result, net (440,008) (168,257) 161.5% (878,261) (376,085) 133.5% PROFIT (LOSS) BEFORE TAXES ON INCOME (335,803) (48,990) - (1,024,660) (99,189) 933.0% Income Tax and Social Contribution 57,117 91, % 201,519 (187,813) - NET INCOME (LOSS) (278,686) 42,787 - (823,141) (287,002) 186.8% 32

33 7.2 BALANCE SHEET ASSETS ASSETS (R$ Thousand) 12/31/ /31/2017 % CURRENT ASSETS Cash and cash equivalents 170,019 1,463, % Short-term investments 215, , % Derivative financial instruments 37, , % Accounts receivables 335, , % Inventories¹ 827, , % Biological Assets 941, , % Recoverable taxes 339, , % Other receivables 78, , % Assets held for sale 3,506 3,506 - Total current assets 2,949,887 4,109, % NON CURRENT ASSETS Long-term investments 21,920 19, % Advances to suppliers 18,830 14, % Escrow deposits 345, , % Recoverable taxes 87, , % Deferred income tax and social contribution 62,125 3, % Other receivables 11,648 17, % Investments 185, , % Property, plant and equipment 4,026,446 4,489, % Intangible assets 926, , % Total non-current assets 5,685,549 6,179, % TOTAL ASSETS 8,635,436 10,288, % 1 - Includes commodity products to fulfill export performance contracts: R$257 million on 03/31/

34 7.3 BALANCE SHEET LIABILITIES AND EQUITY LIABILITIES AND SHAREHOLDERS' EQUITY (R$ Thousand) 12/31/ /31/2017 % CURRENT LIABILITIES Borrowings and financing 2,097,934 1,944, % Advance from domestic customers 23,379 30, % Advance from foreign customers 369, , % Accounts payables 987, , % Accrued payroll and related taxes 116, , % Taxes payable 95,514 49, % Derivative financial instruments 41,635 28, % Other payables 203, , % Total current liabilities 3,935,654 3,631, % NON CURRENT LIABILITIES Borrowings and financing 3,355,261 4,344, % Advance from foreign customers 2,379,130 2,427, % Accounts payables 1,310 1, % Deferred income tax and social contribution 41, , % Derivative financial instruments 12,018 16, % Provision for tax, labor, civil and environmental contigencies 305, , % Other payables 47,355 56, % Total non-current liabilities 6,141,577 7,318, % SHAREHOLDERS' EQUITY Social Capital 2,618,214 2,618,214 - Capital reserve 1,360,072 1,355, % Accumulated losses (4,971,760) (4,148,598) 19.8% Other comprehensive income (loss) (460,181) (503,033) -8.5% Total equity attributable to shareholders (1,453,655) (677,801) 114.5% Non-controlling interest 11,860 16, % Total equity (1,441,795) (661,518) 118.0% TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 8,635,436 10,288, % 34

35 7.4 CASH FLOW STATEMENT Cash FLOW (R$ Thousand) 12/31/ /31/2016 CASH FLOW FROM OPERATING ACTIVITIES NET INCOME (LOSS) (823,141) (287,002) Non-cash transactions 1,427,477 1,263,030 Depreciation and amortization 1,115,230 1,010,766 Losses (gains) from changes in the Fair Value minus estimated costs to sell Biological Assets (39,642) (299,565) Interest, exchange rate changes and inflation adjustments, net 563,984 (48,191) Losses/(gains) on hedge operations 64, ,418 Deferred Income tax and social contribution (202,818) 187,655 Other non-cash transactions (73,887) 49,947 Decrease/(Increase) in assets 206,977 (385,302) Increase/(Decrease) in liabilities 158,420 (679,489) Dividends received - - Interest paid on borrowings and financing (345,366) (375,214) Net cash provided by/(used in) operating activities 624,367 (463,977) CASH FLOWS FROM INVESTING ACTIVITIES Increase in property, plant and equipment (307,463) (425,117) Additions to biological assets (397,813) (383,427) Increase in intangible assets (2,157) (5,933) Decrease/(Increase) in short-term investments (101,546) 150,632 Other (42,473) (47,236) Net cash provided by/(used in) investing activities (851,452) (711,081) CASH FLOW FROM FINANCING ACTIVITIES Borrowings and financing 2,501,935 2,363,672 Payment of borrowings and financing (3,568,269) (2,753,796) Net cash provided by/(used in) financing activities (1,066,334) (390,124) INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS (1,293,419) (1,565,182) Cash and cash equivalents at the beginning of the period 1,463,438 1,826,121 Cash and cash equivalents at the end of the period 170, ,939 35

36 8. APPENDIX MARKET OVERVIEW Sugar Price Sugar prices in USD averaged c/lb in, increasing 4.3% from 2Q18. Compared to, prices fell 30.3% (20.87 /lb). In BRL, the decline was intensified by the BRL strengthening against the USD, with the average price reaching R$ 47.4 c/lb in the quarter, 30.8% lower than in (R$68.56 c/lb). Fundamentals By end-december, Brazil s Center-South region had processed million tons of sugarcane, or 1.5% less than in the previous season. The share of sugar in the mix also decreased, with mills gradually migrating to mixes with a higher share of ethanol, influenced by the more favorable prices for ethanol than sugar since August. On the other hand, sugar production came to 35.8 million tons in the period, growing 1.7% from, mainly due to the higher TRS content this crop year and higher crystallization capacities in the industry. The period also marked the start of the 2017/18 crop year in the northern hemisphere (Oct/17 to Sep/18). Favorable weather conditions in India, Thailand and Europe resulted in high cane yields. Global sugar output should set a new record of 186 million tons in 2017/18. After a shortfall of some 0.5 million ton in the prior crop year, the global market is expected to post a surplus this year, even with the expected drop in production in Brazil s Center-South region. This surplus is mainly due to the expectation of higher supply from certain producing regions, such as India, Thailand, Europe and China. This supply-demand imbalance, combined with the activities of speculative funds, has been driving sugar prices lower. The net effect of the above factors is shown in the following chart: Average Prices of VHP, Crystal and Refined Sugar (US$) VHP (#NY11) cus$lb Cristal (ESALQ) US$/Ton Refinado (Londres) US$/Ton Source: Bloomberg, December

37 Ethanol Price In, hydrous ethanol net prices averaged R$1,647/m³, down 11.8% from R$1,867/m³ in. Meanwhile, anhydrous ethanol traded at an average of R$1,559/m³, a premium of 9.3% on the hydrous ethanol price net of ICMS tax. Supply and Demand Brazilian ethanol production (CS and NE) from October to December of the 2017/18 crop year amounted to 5.7 million m³, increasing 15.7% from the same period last crop year. Of this amount, 3.47 million m³ was hydrous ethanol, which corresponds to a share of 59.7%, up from 52.7% in the year-ago period. Total ethanol consumption increased 12.2% between periods, resulting in demand of 7.5 million m³ in, compared to 6.7 million m³ in, mainly due to the higher share of hydrous ethanol in the country s fuel profile. On the other hand, the consumption of Otto-Cycle fuels was flat. Total consumption of Otto-Cycle products (ex-diesel and VNG) is estimated at million m³, compared to million m³ in the same period of the 2016/17 crop year. The higher ethanol supply boosted Brazilian exports of the product, which amounted to 345,700 m³ in, compared to the 204,800 m³ exported in. Imports decreased from 345,300 m³ in to 289,600 m³ in, mainly due to the duties that weighed on imports of corn-based U.S. ethanol by reducing the product s competitiveness. The net effect of the above factors is shown in the following chart: Hydrous and Anhydrous Ethanol Average Prices (R$/m³) Hidratado (ESALQ) Anidro (ESALQ) Source: Bloomberg, December