Luis Henrique. Guimarães CEO - PDF Free Download

Luis Henrique Guimarães CEO

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 forwardlooking 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

Safety Daily commitment to ZERO ACCIDENT 2.0 LTIF (Lost Time Injury Frequency) 0.8 0.5 0.3 0.2 0.2 0.1 0.1 11 12 12 13 13 14 14 15 15 16 16 17 17 18 jan-19 Note: LTIF = Lost time injury frequency Number of accidents with lost time by the employees over the quantity of the exposure expressed in million of worked hours 3

Integrated Energy Co. 4

Strong Financial and Operational Positions 4 th LARGEST Private Brazilian group in net revenue (Valor 1000 2017) +100 bi BRL net revenue 7 bi BRL EBITDA GLOBAL INVESTMENT GRADE BBB / BBB by Fitch e S&P 860 +7 +1,000 26 thousand thousand hectares of sugarcane area Shell branded service stations Shell Select C-Stores S&E bioenergy mills and one E2G plant 1 Refinery 5

Understanding the 2018/19 Perfect Storm Sugar & Ethanol Weather-related setbacks and low sugar prices Dry intercrop season impacting agricultural yields Diesel prices and crop extension impacting Industry s cost Higher sugar output from other producing countries Fuels Truckers strike, higher oil price and FX volatility Petrobras pricing dynamics reflecting international prices Governmental subvention to diesel and inventory loss Steep decline on Otto cycle volume 6

combustíveis

Fuels Demand Volume under pressure for 4 years Fleet vs. Consumption (% annual) Fleet Gasoline Equivalent "Otto Cycle" Average Gasoline Price (BRL/l) 4.2 3.5 3.6 3.2 2.9 7.7% 4.6% 3.5% 3.4% 3.8% 6.2% 0.5% -0.9% 0.8% -3.1% GDP vs. Diesel Consumption (% annual) 2.5% 0.5% GDP Brazil Diesel -3.5% -3.3% -4.7% -5.1% 1.1% 0.9% 1.6% 1.1% 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 8

Consistently outperforming competition Strong relationship with retailers supporting sustainable growth Volume growth vs industry Volume (mln cbm) & Market share Service Stations Throughput (cbm/month/stations) 6% 5% 8% -4% 1% -2% Raízen ANP (ex. Raízen) Plural (ex. Raízen) -1% -4% 3% 1% 0% -2% -2% 17.2% 17.7% 18.3% 18.7% 19.0% 24.9 25.1 24.8 25.6 26.0 5,356 5,682 6,027 6,272 6,524 259 251 256 Plural (ex. Raízen) 246 234 232 224 223 Raízen 214 216-12% 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Note: Excludes grease and lubricants Note: Volume based on Plural methodology Market Share excludes grease and lubricants Note: Brazil performance, excluding Argentina 9

Solid strategy and best in class execution Robust results despite challenging scenario Adjusted EBITDA (BRL bln) Investments (ex. M&As) (BRL bln) Cash Generation (EBITDA Investments) (BRL bln) 2.1 2.5 2.8 2.9 2.8 1.0 0.8 0.8 0.8 0.9 1.7 2.0 2.2 1.9 1.1 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 2014 2015 2016 2017 2018 Note: EBITDA adjusted by asset sales and non recurring effects; excludes Argentina 10

energia

mln t, raw value 2018/19 Perfect storm Unusual combination of weather-related crop setbacks and low sugar prices Sugar - World S&D 15 50% 120 Historical Sugar Prices 10 45% 100 5 40% 80-35% 60-5 30% 40-10 25% 20-15 * * * * 20% 0 * * * * Surplus/Deficit Stock To Use c$/lb cr$/lb real terms * Crushing impacted by dry weather

Journey to efficiency Crushing setback combined with higher diesel price preventing cost dilution CAPEX & OPEX (BRL bln) CLT Cut, Loading & Transportation (BRL/ton) Industrial Costs (BRL/ton) Planting & Treatment (BRL bln) Fixed Costs Variable Costs (ex. Third Party Sugarcane) Diesel Effect (-0.9) Volume Effect (-1.1) Planting Land treatment Own sugarcane crushed (mln TC) 4.4 3.9 4.0 4.2 4.4 32.9 28.4 25.4 26.5 29.2 21.4 18.3 20.7 18.0 18.2 29 31 29 30 30 1.2 0.8 0.9 1.0 1.2 2014/15 2015/16 2016/17 2017/18 LE 18/19 2014/15 2015/16 2016/17 2017/18 LE 18/19 2014/15 2015/16 2016/17 2017/18 LE 18/19 2014/15 2015/16 2016/17 2017/18 LE 18/19 Note: Results in real terms. Does not consider M&A figures 13

Focus on operational efficiency and continuous improvement Planting Productivity Hectares Planted / Equipment / Day 7 7 10 12 12 CLT Productivity Ton of cane / Equipment / Day 617 711 675 735 685 14'15 15'16 16'17 17'18 18'19 LE 14'15 15'16 16'17 17'18 18'19 LE Industrial Efficiency In % 94% 93% 93% 94% 96% Energy Generation Total volume of Energy Exported to the grid (MWh) 2,152 2,379 2,213 2,390 2,437 14'15 15'16 16'17 17'18 18'19 LE 14'15 15'16 16'17 17'18 18'19 LE 14

Focus on achieving industry s lowest unit cost Increased capacity utilization will drive additional cost reductions Total cost per sugar equivalent ( $/lb) Real Terms 14.0 12.1 12.6 12.7 11.4 10.7 11.4 11.2 10.9 10.9 Reported Adjusted Dolar R$ 3.80 Diesel R$ 2.67/l Consecana R$ 0.60/kg ATR 14/15 15/16 16/17 17/18 18/19 15

Financial Highlights EBITDA Adj. EBITDA (BRL bln) Adj. EBITDA / Crushed Sugarcane Adj. EBITDA / Crushed Sugarcane (3 year moving average) 67 63 49 48 60 59 51 53 46 46 4.1 3.7 2.8 3.0 3,0-3,2 EBIT Adj. EBIT (BRL bln) Adj. EBIT / Crushed Sugarcane Adj. EBIT / Crushed Sugarcane (3 year moving average) 32 33 15 18 27 27 22 16 15 16 1.9 2.0 0.9 1.1 1,0-1,1 2014/15 2015/16 2016/17 2017/18 LE 2018/19 2014/15 2015/16 2016/17 2017/18 LE 2018/19 Note: Results expressed in Raízen s perspective consider an estimate to 2018 19 crop results 16

COMBINED RESULTS 17

Raízen Combined Results Weathering the Perfect Storm Adjusted EBITDA (BRL bln) Investments (ex M&As) (BRL bln) Cash Generation (EBITDA Investments) (BRL bln) Dividends (BRL bln) 5.0 5.5 6.7 7.1 6,3-6,4 3.3 2.5 2.9 3.2 3,7-3,8 1.7 3.0 3.7 3.9 2,5-2,7 1.3 1.7 2.7 3.0 2.3 2014/15 2015/16 2016/17 2017/18 LE 18/19 2014/15 2015/16 2016/17 2017/18 LE 18/19 2014/15 2015/16 2016/17 2017/18 LE 18/19 2014/15 2015/16 2016/17 2017/18 LE 18/19 Note: Results expressed in Raízen s methodology. EBITDA adjusted by biological assets effects, foreign exchange impact in the sugar revenue, hedge accounting, asset sales and non recurring effects. LE includes 6 months of Raízen Argentina's results 18

MARKET TRENDS 19

Market trends Growing Demand for Clean Energy Digital Revolution New Consumption Behavior Hybrid and Electric Cars Distributed Energy Generation 20

Strategic Response Growth Avenues Focus on Brazilian Market Ethanol Trading Bioenergy Producer B2B Fuel Supplier Retail through Resellers Product Approach (E+S+B) FROM FROM TO TO Expansion to new markets and geographies Strategic Trading to Raízen s Portfolio Integrated Energy Company Products and Solutions Strategic B2B Partner Digital B2B2C + New Experiences Portfolio Evolution 21

Recent Movements Expansion to new markets and geographies Strategic Trading to Raízen s Portfolio Integrated Energy Company Products and Solutions Strategic B2B Partner Digital B2B2C + New Experiences Portfolio Evolution Raízen Argentina Storage capacity Sugar supply chain International Ethanol Trading South cone Trading Integration 22

Raízen Argentina Replicate and expand Raízen s successful business model Unique opportunity in downstream Healthy operational environment Fits to Raízen s strategy and expertise in fuel distribution Integrated business model with value generation Growth opportunities with synergies Refining Retail Potential of synergies / upsides Metropolitan area of Buenos Aires 2 nd Largest Refinery in Argentina (18% of the country's capacity) Strong conversion capability to focus on high value products Recent acquisition of neighbouring terminal to improve supply chain 676 Shell branded gas stations with a throughput of 420 m3 per month Total Sales Volume of 3,2 bi m 3 2 nd place with approximately 21% #1 in Premium fuels with 36% penetration on average Growth Trading & Supply Logistic optimization Loyalty Digital & Non-Fuels Efficiencies 23

Energy Integrated Company End-to-end values chain BIOGAS DISTRIBUTION COGENERATION ELECTRICITY TRADING INDUSTRY SOLAR ETHANOL ELECTRIC CHARGER DIGITAL INTERFACE DRIVERS (B2C & B2B) REFINERY FUEL DISTRIBUTION GAS STATION IMPORTS In Operation In Construction 25

Recent Movements Expansion to new markets and geographies Strategic Trading to Raízen s Portfolio Integrated Energy Company Products and Solutions Strategic B2B Partner Digital B2B2C + New Experiences Portfolio Evolution Electricity Trading Shell Box C-Stores Fleet Management 26

DIVERSE AND ENERGIZED TEAM BUILDING A STRONG CULTURE REALIZE AMPLIFY INCENTIVIZE ZEAL while looking to the future the best in each of us innovative look productive relationships

Guidance 2019/20 Expansion in all segments resulting in a combined EBITDA of BRL 7.5 bln (mid point) Raízen Combustíveis Guidance (jan/19-dec/19) Raízen Energia Guidance Safra 2019/20 (apr/19-mar/20) EBITDA (BRL mln) 2,900 Δ 3,200 Crushing volume ('000 ton) 61,000 Δ 63,000 Investments (BRL mln) 950 Δ 1,150 EBITDA (BRL mln) 3,400 Δ 3,800 Raízen Argentina Guidance (jan/19-dec/19) Investments (BRL mln) 2,700 Δ 2,900 EBITDA (USD mln) 210 Δ 260 Investments (USD mln) 100 Δ 140 Note: None of the guidance considers effects of IFRS 16 to be implemented on 04/01/2019. Results expressed in Raízen s methodology EBITDA: Adjusted by biological assets effects, foreign exchange impact in the sugar revenue, hedge accounting, asset sales and non recurring effects CAPEX: Does not consider investment of acquisition of Raízen Argentina 29