Institutional Presentation Caixa para descrição.

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1 Institutional Presentation 2016 Caixa para descrição.

2 Disclaimer This presentation contains estimates and forward-looking statements regarding our strategy and opportunities for future growth. Such information is mainly based on our current expectations and estimates or projections of future events and trends, which affect or may affect our business and results of operations. Although we believe that these estimates and forward-looking statements are based upon reasonable assumptions, they are subject to several risks and uncertainties and are made in light of information currently available to us. Our estimates and forward-looking statements may be influenced by the following factors, among others: (1) general economic, political, demographic and business conditions in Brazil and particularly in the geographic markets we serve; (2) inflation, depreciation and devaluation of the real; (3) competitive developments in the ethanol and sugar industries; (4) our ability to implement our capital expenditure plan, including our ability to arrange financing when required and on reasonable terms; (5) our ability to compete and conduct our businesses in the future; (6) changes in customer demand; (7) changes in our businesses; (8) government interventions resulting in changes in the economy, taxes, rates or regulatory environment; and (9) other factors that may affect our financial condition, liquidity and results of our operations. The words believe, may, will, estimate, continue, anticipate, intend, expect and similar words are intended to identify estimates and forward-looking statements. Estimates and forward-looking statements speak only as of the date they were made and we undertake no obligation to update or to review any estimate and/or forward-looking statement because of new information, future events or other factors. Estimates and forward-looking statements involve risks and uncertainties and are not guarantees of future performance. Our future results may differ materially from those expressed in these estimates and forward-looking statements. In light of the risks and uncertainties described above the estimates and forward-looking statements discussed in this presentation might not occur and our future results and our performance may differ materially from those expressed in these forward-looking statements due to, inclusive, but not limited to the factors mentioned above. Because of these uncertainties you should not make any investment decision based on these estimates and forward-looking statements. 2/23

3 Agenda 1 Rumo Overview 2 Strong Business Case 3 Turnaround Strategy in Place 4 Financial and Operational Update 5 Closing Remarks 3/23

4 Timeline 2008 Rumo creation 2009 Rumo & ALL agreement 2010 Rumo private placement by TPG and Gávea 2014 Rumo & ALL merger proposal 2015 Rumo ALL merger conclusion 1999 ALL creation 2004 ALL IPO 2008 Rondonópolis project 2013 Conclusion of Rondonópolis project 2016 Rumo s capital increase Privatization of Brazilian Railway System 4/ Acquisition of Brasil Ferrovias 2010 ALL adheres to Novo Mercado

5 Business Model Logics Nonreplicable Footprint Soybean Sugar cane Corn Rumo is the largest independent railroad operator in Brazil Covers the 3 main exporting corridors of agricultural commodities Santos Paranaguá São Francisco Rio Grande GDP Growth: (Accumulated %) 21,9% 17,0% 10,2% 8,6% 9,1% Mato Grosso Mato Grosso do Sul Paraná Brazil Agribusiness GDP Source: Rumo Note: (1) in volume 5/23

6 Shareholders Structure 72.23% Members of Shareholders Agreement Others Free Float 28.27% 3.65% 0.96% 8.02% 13.90% 45.21% North Operation South Operation Containers Operation Source: Rumo Note: Rumo s business units not representing individual companies 6/23

7 Agenda 1 Rumo Overview 2 Strong Business Case 3 Turnaround Strategy in Place 4 Financial and Operational Update 5 Closing Remarks 7/23

8 Strong Business Case Nonreplicable Business Model Extremely low demand risk Huge entry barriers Most competitive logistics option for the region Large cost reduction opportunities with capacity increase Company funding fully addressed until /23

9 Extremely Low Demand Risk Unserved demand and a growing market assure large growth potential Key Markets Brazil Grain Production 000 tons Mato Grosso Grain Production 000 tons Paraná and Mato Grosso do Sul Grain Production 000 tons +107% +129% +112% Santos Paranaguá São Francisco Rio Grande Rumo s Addressable Market Brazil Grain Production Brazil Grain Exports Grain Exports Through Santos and South Ports share 83 Domestic Consumption ~181mm tons 98 Exports Other Ports 28 ~98mm tons 70 Santos and South ports Other players 45 ~70mm tons 25 Rumo s Share ~25 mm tons 9/23 Source: Rumo; MDIC; CONAB for 2015

10 Corn Soybean Extremely Low Demand Risk (Cont d) 80% of Rumo s demand is grounded on the Brazilian agricultural exports, which keep on growing regardless of macro conditions Grains Sugar Fertilizer (Soybean and Corn) (Sugar) (Brazilian imports) (in million tons) (in million tons) (in million tons) 51,0 9.1% 56,0 57,4 73,0 8.8% 81,5 80,1 84,7 31,9 36,4 38,4 2.0% 36,2 38,6 37,8 35,9 11,0 15,3 11.4% 19,9 19,5 21,6 24,0 21,1 57,2 68,7 75,3 66,4 81,5 86,1 96,2 08/09 09/10 10/11 11/12 12/13 13/14 14/15 Soy Corn 08/09 09/10 10/11 11/12 12/13 13/14 14/15 08/09 09/10 10/11 11/12 12/13 13/14 14/15 Main ports for Soybean and Corn Exports Main ports for Sugar Exports Main ports for Fertilizer Imports (in million tons) Ports where Rumo Operates (in million tons) Ports where Rumo Operates (in million tons) Ports where Rumo Operates 12,7 8,2 7,5 4,9 3,2 18 9,7 Santos Rio Grande Paranaguá S. Francisco São Luis 8, ,5 2,1 1,2 4,1 1,5 0,4 0,2 2,4 0,6 1,5 Santos Paranaguá Vitória S. Francisco Rio Grande Santos Paranaguá Maceió Recife Recife (Suape) Santos Paranaguá Vitória São Francisco Source: 2016 Agrianual Report; Informa Economics FNP; SECEX; USDA; CONAB; Central Bank of Brazil 10/23 Legend Agricultural Total

11 Huge Entry Barriers Asset Base 70% Of the exported grains uses the South and Santos ports 90% Of the sugar is exported through the Santos and Paranaguá ports Network 4 concessions to explore with exclusivity the rail transportation in the region Extension Concession Maturity Volumes (RTK mm) Net Revenues (R$ mm) North 754 km Paulista 1,989 km South 7,265 km West 1,945 km Santos Paranaguá São Francisco The largest bulk port terminal in South America Huge scale leverage Nonreplicable cost structure Source: Rumo Note: (1) in volume Rio Grande 11/23

12 Large Cost Reduction Opportunities With Capacity Increase Most competitive logistics option for the region Example: Rondonópolis to Santos Port PRE MERGER TRAIN CURRENT TRAIN STATE OF THE ART TRAIN 73 railcars 80 railcars 120 railcars ~2.0x Volume per train trip (tons) 5,375 6,400 10,800 # Trips per year ~2.9x Volume per train per year (tons) 172, , ,714 Cost per ton (R$/ton) (R$ 82) (R$ 73) (R$ 56) Margin per Year R$ 13.5 mm R$ 19.5 mm ~3.8x R$ 51.4 mm Source: Rumo creating further competitiveness against trucks 12/23

13 Company funding fully addressed until 2018 Funding will be used to enhance Rumo s balance sheet and support its long term investment plan Capital Increase Debt Restructuring BNDES Credit Reinforce company s capital structure Reschedule debt maturity of next 3-years Access to new credit lines Post Money Capital Structure 1 Net Debt / EBITDA 5.1x 3.8x R$ mm (757) ,600 Total Debt Cash Net Debt Follow-on New Net Current Debt P P P Current Amortization Schedule (R$ bn) New Amortization Schedule (R$ bn) Debt Amortization Schedule Financial liabilities refinanced by 5 major banks R$2.9 billion in short term debt replaced by medium term debt 3 years of grace period amortization, from 2019 to ,1 2,9 2,7 0,9 0,8 0,4 0,2 0,2 0,4 1,7 1,7 1,3 1,2 1,6 1,2 1,0 0,6 0,4 P BNDES Funding ~R$ 3.5 billion² R$ 1.5 billion direct exposure of BNDES Total cost: ~ 9.0% p.a.+ risk spread Maturity: up to 19 years P R$ 1.0 billion loans with bank guarantees Total cost: BNDES cost + risk spread Maturity: up to 19 years R$ 300 million new convertible debentures P (to be structured) R$ 700 million already contracted P Source: Rumo Note: (1) As of Dec. 31 st, 2015; Cash and Derivatives (2) Subject to certain conditions 13/23 Support to Rumo s Growth Strategy

14 Agenda 1 Rumo Overview 2 Strong Business Case 3 Turnaround Strategy in Place 4 Financial and Operational Update 5 Closing Remarks 14/23

15 New management new mindset Experienced team with a proven track record already reflecting better results New Management KPIs Improvement in 2015 vs Julio Fontana Chief Executive Officer 40 6 Bachelor s degree in mechanical engineering and in business administration from Mackenzie and a master s degree in administration from IESE Business school, Spain Former chief executive officer of MRS Logística with experience in logistics, railroad operations and infrastructure 10% 4.4 billion volume RTK increase transported reaching October 4.4 billion New RTK transported record! in October 2015 José Cezário Chief Financial Officer 23 6 Bachelor s degree in accounting from the University of Vila Velha and a master s degree in management from the FGV Former financial director of Cosan and held executive positions in Embraer, BR Foods, Femsa and audit firms PwC and Deloitte 5% increase in elevated volume at Santos Port 25 6 Daniel Rockenbach North Operations Bachelor s degree in business administration from the PUC of Rio Grande do Sul as well as a post-graduate degree in marketing from the Federal University of Rio Grande do Sul Former CEO of Rumo and executive positions in Ambev, ALL and MRS Logística 7% reduction on Transit Time from Rondonópolis to Santos Port 17 1 Darlan de David South Operations Bachelor s degree in electrical engineering from the UFRGS, a MBA in logistics, operations and services from COPPEAD and has completed an executive development program at IMD in Switzerland Former CEO of Rifty Valley Railways, and executive positions in ALL and MRS Logística, with extensive knowledge of the sector 6% increase in the average tons per train from Rondonópolis to Santos Source: Rumo 15/23 Legend Years of Experience Years at Rumo/ Cosan

16 Higher Revenues Guaranteed New Contract Terms Main Initiatives New commercial approach and solid client portfolio The new commercial approach, combined with a strong portfolio of clients, ensure revenues and predictable cash flows New Commercial Approach Strong and Diversified Client Base Narrowing the relationship with the current base of clients Grains Sugar Increase of the guaranteed volume Monthly follow-up of the contracts Industrial Fuel Strategy of long-term agreements of up to 3 years Strong take-or-pay clauses for Rumo Reduction in the average tolerance of volume from 15% to 10% Increase in the average fine, from 25% to 44% over the contractual yield Pulp & Paper Client Base Profile (2015) Increase in Rumo s guaranteed revenues with the new commercial approach Others Industrial 11,5% 5,3% Sugar 9,2% +20 p.p. Container 4,8% 20% 40% Grains 69,2% Source: Rumo; 2016 Agrianual Report; Informa Economics FNP; SECEX; USDA; CONAB; UNICA Note: (1) Includes highways 16/23

17 9-Months On Track Less than a year after the merger the turnaround is already yielding results Operational Figures Transported Volume (RTK¹ mln) Net Revenues (R$ mm) Financial Figures 42,958 5% 44,910 4,217 14% 4, Loading Volume at Santos Port (tons mm) 5% 11,682 11, EBITDA and EBITDA Margin (R$ mm) 40% 35% 1,493 28% 1, Average Unitary Freight (R$/ 000 RTK) EBITDA Recurring CAPEX (R$ mm) 75 11% % 1, Source: Rumo Note: (1) RTK Revenue Ton Kilometer 17/23

18 Agenda 1 Rumo Overview 2 Strong Business Case 3 Turnaround Strategy in Place 4 Financial and Operational Update 5 Closing Remarks 18/23

19 120 00, , , , , , Consolidated Results Operations Transported Volume (mm RTK) Transported Volume Breakdown 9,032 2, % 10,075 1,736 Industrial 19% Others 5% Sugar 7% 6,828 8,339 Container 6% 1Q15 1Q15 Agricultural products 1Q16 Industrial products Grains 63% Loading Volume (MM tons) and Yield (R$/ton) % Container 4% Industrial 13% Others 1% Sugar 6% 2,470 2,855 1Q16 Grains 76% 1Q15 Loading volume Yield 1Q16 Source: Rumo 19/23

20 , 0% 35, 0% 30, 0% 25, 0% 20, 0% 15, 0% 10, 0% 5,0 % 0,0 % Financial Update 1Q16 Net Revenue (R$ mm) Gross Profit (R$ mm) and Gross Margin (%) % % 26.5% +18% Q15¹ 1Q16 1Q15¹ 1Q16 EBITDA (R$ mm) and EBITDA Margin (%) EBITDA Recurring CAPEX (R$ mm) 32.1% 37.5% % +2.6x Q15¹ 1Q16 1Q15¹ 1Q16 Source: Rumo Note 1: Combined figures for /23

21 Long-Term Projections Estimates¹ VOLUMES (TKU BLN) 69 D 71 EBITDA (R$ BLN) 4.5 D D 51 CAGR: +9% CAGR: +18% 2.3 D E 2020E 2016E 2020E CAPEX (R$ BLN) 1.7 D % 2.3 D D % 61% 1.5 D % 1.0 D % 37% 32% 39% 52% 75% 2016E 2017E 2018E 2019E 2020E Recurring Expansion Note 1: Information on EBITDA and Capex curves mentioned above are expressed in nominal terms and is based on IGP-M with the following curve: % p.a., % p.a., % p.a. and % p.a. Any changes in these curves do not represent significant impact on Company's results. 21/23

22 Agenda 1 Rumo Overview 2 Strong Business Case 3 Turnaround Strategy in Place 4 Financial and Operational Update 5 Closing Remarks 22/23

23 Investment Highlights Rumo has all the elements to support its business model and leverage its market position Presence in the most important grain producing regions in Brazil Extremely low demand issue from agribusiness Client base focused in exports: natural hedge against domestic volatility Favorable trends for the agribusiness in Brazil: expected increase in the produced volume Natural regional leader supported by large barriers to entry The only player in the region with the concessions to operate the railway network Ongoing cost reduction initiatives Current turnaround process aimed to reduce costs, increase efficiency and unlock capacity Opportunity to gain market share and leverage Rumo s position Capturing the volume from highway by increasing the capacity offer at competitive prices Maximize the load factor of the system Source: Rumo 23/23