Results 2Q 10 São Paulo November 13 th, 2009 1
Initial Remarks After changes in Fiscal Year 2009, 2Q 10 comprises the months of July, August and September, while 2Q 09 comprises the months of August, September and October; This quarter will be the first with results for 3 full months of operations of NovAmerica integrated with the Cosan Group. 2
COSAN Highlights 2Q 10 (R$MM) Consolidated Net Revenue 3,575.3 +400% Net Revenue by Product 22% 9% 5% 3% 2,412.1 33% 60% 1% 4% 62% 715.1 1,265.6 57% 9% (102.3) 10% 22% 5% CAA CCL Eliminations from Consolidation Sugar Ethanol Others Consolidated Net Revenue of R$3.6 billions, 400% higher than results form ; CAA invoiced R$1.2 billion, increase in sugar volume and better sugar/ethanol prices; CCL invoiced R$2.4 billions, with higher ethanol and diesel volumes and logistics synergies gains. Fuels Lubes Net Revenue by Market Export 70% Export 17% Local 30% Local 83% 3
COSAN Highlights 2Q 10 Consolidated EBITDA EBITDA by segment (R$MM) 2Q 09 2Q 10 +95% 355.6 86.3 100% 75.7% 182.5 269.3 24.3% CAA CCL Record EBITDA of R$355.6 millions, 95% higher compared to 2Q 09; CAA EBITDA of R$269.3 millions, up 47% compared to 2Q 09 In 2Q 09, CAA represented 100% of EBITDA; In 2Q 10, CAA represented 75.7%, while CCL represented 24.3% of Consolidated EBITDA. CCL EBITDA of R$86.3 millions 4
COSAN Highlights 2Q 10 Net Income (R$MM) 173.4 4.8% 173.4 4.8% 7.2% 511.0 2Q 09 2Q 10 (381.0) (381.0) YTD 09 (439.0) YTD 10-53.3% -53.3% Net Income -32.4% Net Margin Net Income of R$173.4 millions in 2Q 10 and net margin of 4.8%. Positive non-cash effect due to FX variation and, mainly, due to strong operating quarterly results derived from better sugar prices, recovering of ethanol prices and good distribution margins contributed to the results; Accumulated net income of R$511.0 millions in YTD 10, with net margin of 7.2%. 5
CAA 6
Sugar Market Overview Brazil Center-South Region STATES MONITORATED São Paulo, Paraná, Minas Gerais, Goiás, Mato Grosso do Sul e Mato Grosso Rainfalls Volume Months of July, August and September with heavy rainfalls Mean Rainfall Mean Rainfall Mean 9 years 7
Sugar Market Overview Brazil Cane Processed Sucrose yield CS Brazilian harvest affected, reducing cane processed and sucrose yield; UNICA estimates for 2009/10 crop revised down. India Stock Volume The end-of-season stock ratio (as at 30 Sept 2009) of 15.7% is the lowest percentage already on record for India; Recently, the Indian Government announced a Fair and Remunerative Price (FRP) of cane of Rs1.298,4/mt (US$27,9/ton). 8
US /lb US$/ton Sugar Market Overview Importers Mexico Inventories deteriorating due to last year s poor harvest and exports to the USA Russia Preliminary figures for the sugar beet harvest point towards a reduction in productivity per hectare; Low sugar output and inventories could lead the government to suspend the import surcharge Sugar Domestic Market Sugar Prices International and Domestic Prices Low production due to unusual heavy rainfalls and strong sugar exports; Domestic crystal sugar prices (ESALQ) averaged R$47.37/50kg bag (or R$ 947.34/t) in the 2Q 10, 6.6% up on the previous quarter and 63.3% up on the 2Q 09 30,0 25,0 20,0 15,0 10,0 5,0 NY#11 +39.7% QoQ 661,4 551,2 440,9 330,7 220,5 110,2 - out-07 jan-08 abr-08 jul-08 out-08 jan-09 abr-09 jul-09 - NY #11 LIFFE #5 ESALQ Cristal 9
R$/thousand R$/mil litros liters Milhares Ethanol Market Overview Flex-Fuel Vehicles Sales According to ANFAVEA, until September, flex vehicles sales totalized 1.962 millions, an increase of 7% comparing to 9 months of 2008; In the last 3 months without IPI tax, vehicles sales boosted, and September sales were record in the sector; Approximately 90% of total car sales in 50 2009 were flex-fuel vehicles. 0 300 250 200 150 100 2007 2008 2009 Jan Fev Mar Abr Mai Jun Jul Ago Set Out Nov Dez Ethanol Prices Domestic Market 1.200,0 1.000,0 800,0 600,0 400,0 out-07 jan-08 abr-08 jul-08 out-08 jan-09 abr-09 jul-09 Anidro Hidratado Anhydrous Hydrous Recovering prices seem to reflect: Low level of stocks expected to the interharvest period resulted from a higher sugar mix production; High ethanol sales due to recovering of domestic market; Atypical rainfalls reduced processed cane; Anhydrous price at R$0.838/liter, 21.9% higher than last quarter; Hydrous price at R$0.736/liter, 22.4% higher than last quarter; 10
Financial Highlights - Sugar Sugar Volume & Avg. Unit Price Net Revenue (Mil tons R$ / ton) 798.9 726 (R$ MM) +95.0% 798,9 554 +48.8% 1,101.1 409.7 739.9 496.7 778,6 409,7 496,7 352.5 57.2 647,7 92,2 302.2 322,5 352,5 57,2 302,2 2T'09 2T'10 2T'09 2T'10 Local Volume Export Avg. Unit Price Local Export COGS & Avg. Unit Cost Unit Gross Margin (R$ MM R$ / ton) 404 475 (R$ / ton) 27.0% 34.6% +74.7% 522.7 +68.5% 251.0 299.2 149.0 2T'09 2T'10 2T'09 2T'10 COGS Avg. Unit Cost Unit Gross Margin Gross Margin 11
Financial Highlights - Ethanol Ethanol Volume & Avg. Unit Price (Million liters R$ / thousand liters) 857 (R$ MM) Net Revenue 232.8 232,8 143.5 143,5 89.3 89,3 281.7 167.4 114.3 327.8 327,8 +60% 212.9 212,9 114.9 114,9 694 450.7 165.6 285.0 232.8 143.5 89.3 +40.8% 327.8 114.9 212.9 2T'09 2T'10 Local MI Volume Export ME Avg. Unit Price Local Export COGS & Avg. Unit Cost (R$ MM R$ / thousand liters) 672 707 +68.3% 318.8 189.4 (R$ / thousand liters) 18.6% 154.0 Unit Gross Margin 2.7% 20.0 COGS Avg. Unit Cost Unit Gross Margin Gross Margin 12
Financial Highlights - CAA EBITDA - CAA EBITDAH - CAA (R$MM) 25.5% 21.3% (R$MM) 25.8% 21.0% 182.5 +47,6% 269.3 185.5 +36,2% 252.6 EBITDA EBITDAH Margin % EBITDAH EBITDAH Margin % 13
CCL 14
Financial Highlights - CCL Net Revenue CCL Net Revenue by Product - CCL (R$ MM) -11.1% (%) 2Q 09 2Q 10 2,713.9 17.2 163.2 2,412.1 18 170.9 2,533.5 2,223.2 6% 1% 6% 12% 37% 39% 8% 1% 7% 1% 8% 1% 7% 1% 45% 38% 38% 45% Fuels Lubes Others Ethanol Diesel Lubes Gasoline Other Fuels Other Products & Services (R$ MM) Cost of Goods Sold - CCL -12.1% 2,533.7 2,228.3 Unit Gross Margin - CCL (R$ / thousand liters) 6.0% 7.7% +18.3% 115.0 136.0 Unit Gross Margin Gross Margin % 15
Financial Highlights - CCL EBITDA - CCL EBITDA/m3 - CCL (R$MM) 3.6% (R$/m3) 3.6% 86.3 63.8 EBITDA EBITDA Margin % EBITDA/m3 EBITDA Margin % 16
Hedge Summary of Hedge on September 30, 2009: Fiscal Year 2009/10 2010/11 Sugar Sugar #11 (NY) - * Volume (thd tons) 1,121 1,063 Average Price ( US$/lb) 18.5 20.5 London #5 Volume (thd tons) 14 - Average Price (US$/ton) 573.7 - FX US$ Volume (US$ million) 803 457 Average Price (R$/US$) 1.837 1.931 * - Includes futures, 'in the money' options and commercial contracts of sale at fixed prices. 17
Net Debt Debt per Type (R$MM) 1Q'10 % ST Var. Nov 12 Foreign Currency 2,135.15 2,494.37 359.2 3,277.5 Perpetual Notes 888.57 809.58 1.2% (79.0) 800.2 Senior Notes 2017 803.26 719.40 1.1% (83.9) 709.7 Senior Notes 2009 71.08 66.40 100.0% (4.7) - Senior Notes 2014-629.97 1.3% 630.0 616.8 IFC 98.82 82.96 23.2% (15.9) 82.1 FX Advances 152.09 90.98 100.0% (61.1) 74.6 Pre-Export Contracts 121.33 95.08 40.2% (26.3) 813.6 Credit Exporting Notes - - - 180.5 Local Currency 2,489.27 2,763.98 274.7 1,599.4 Promissory Notes 1,198.17 1,233.71 24.5% 35.5 - BNDES 360.11 714.76 3.4% 354.6 821.1 Finame (BNDES) 222.71 210.00 24.5% (12.7) 206.4 Working Capital 24.54 20.53 20.5% (4.0) 20.5 Overdraft 0.27 37.24 98.5% 37.0 - Credit Banking Note 216.81 217.44 72.4% 0.6 126.2 Debentures 157.77 152.56 100.0% (5.2) - Credit Notes 343.23 222.93 98.8% (120.3) 125.2 Expenses with Placement of Debt (34.32) (45.19) 40.6% (10.9) - Export Financing - - - 300.0 Gross Debt 4,624.42 5,258.34 22.3% 633.9 4,876.9 Cash & Marketable Securities 932.92 948.65 15.7 793.3 Net Debt 3,691.50 4,309.69 5.4% 618.2 4,083.7 Short Term 1,115.93 1,171.57 (55.6) 238.1 Long Term 3,508.49 4,086.77 (578.3) 4,638.8 Net Debt / EBITDA (LTM) 2.98x 3.12x 3.06x Indebtedness in 2Q 10 Profile reflect the corporate bond issue in CCL Finance totaling US$350 million to extend the debt maturity Also reflects disbursement of resources by BNDES (part of R$639 millions of Jataí and R$149 millions of GASA unit). Payment of Senior Notes 2009 Contract of US$430 millions in Pre-export with duration of 2.5 years Contract of US$100 millions of Credit Exporting notes with maturity of 3 years Payment of Promissory Notes Partial disbursements of resources made by BNDES to Jataí; Payment of Debentures and part of Credits Notes Contract of Export Financing with duration of 2 years Debt Profile Nov 12 Short-term 22.3% 4.9% Long-term 77.7% 95.1% * EBITDA (LTM) 2Q 10-12-month period ended of CAA, ended in Sep 30th, 2009, and 10-month period annualized of CCL and 4-month period annualized of NovAmerica 18
Investments 09 Capex(R$MM) Capex(R$MM) YTD'09 YTD'10 Capex(R$MM) YTD'09 YTD'10 Y 4.6 44.8 Sugar 24.6 Cane 44.8 Planting Costs Sugar Cane Planting Costs 24.6 79.5 116.4 44.8 Sugar 79.5 Cane 116.4 Planting Costs 4.7 1.8 Inter-harvest 14.7 Maintenance 1.8 Inter-harvest Costs Maintenance Costs 14.7 26.6 1.8 Inter-harvest 14.7 26.6 Maintenance Costs 4.4 57.2 Projects 34.4 CAA57.2 Projects CAA 134.4 127.9 57.2 Projects 134.4 CAA 127.9-7.7 Projects - CCL7.7 Projects CCL - 19.3 7.7 Projects - CCL 19.3 3.7 111.5 (=) Operating 73.7 111.5 Capex (=) Operating Capex 228.7 73.7 111.5 290.2 (=) Operating 228.7 Capex 290.2 7.3 92.4 127.3 Co-generation 92.4 Projects Co-generation Projects 127.3 168.9 170.9 92.4 Co-generation 168.9 170.9 Projects 3.3 155.2 113.3 Greenfield 155.2 Greenfield 113.3 181.6 155.2 318.6 Greenfield 181.6 318.6 4.3 359.1 (=) 314.3 Capex 359.1 (=) Capex 314.3 579.1 359.1 779.7 (=) Capex 579.1 779.7 1.4 29.2 Investments 61.4 29.2 Investments 61.4 62.1 (29.4) 29.2 Investments 62.1 (29.4) 1.6 (1.5) Cash 1.6 from Sale (1.5) of Fixed Cash Assets from Sale of Fixed Assets 1.6 (119.2) (1.5) Cash from (119.2) Sale of Fixed Assets 7.3 386.8 (=) 377.3 Investment 386.8 Cash Flow (=) Investment Cash Flow 377.3 641.3 386.8 631.1 (=) Investment 641.3 631.1 Cash Flow Capex: Investments of R$359.1 millions in 2Q 10, up 4.3% compared to 2Q 09, mainly due to: Greenfield: Jataí Unit already in operation and Caarapó will start until the end of this crop; Cogeneration: Advance in Barra and Bonfim unit projects; Projects CAA: Sugar plants expansion, environment improvements, Infrastructure and process;; Planting: Renewal of crops. 19
Notices to Market Bond issue totaling US$350 million at CCL Finance Creation of Share Serviced Center CAN (Centro de Apoio ao Negócio) Announcement of Mr. Marcos Marinho Lutz, as the new CEO of Cosan S.A., taking over on November 1, 2009 Cosan Limited sold 10 million warrants and exercise 39,589,922 subscription warrants, equivalent to 23,753,953 new Cosan S.A. shares. 20
Guidance Guidance 2008FY 2009FY Crushed Cane Volume (thousand tons) 40,315 43,127 Sugar Volume Sold (thousand tons) 3,147 3,052 Ethanol Volume Sold (million liters) 1,568 1,495 Revenues (R$MM) 2,736 6,270 EBITDA (R$MM) 183 718 Net Profit/Loss (R$MM) (48) (474) Capex (R$MM) 1,053 1,346 2010FY Previous Current +20% +30% +20% +30% +60% +80% +30% +50% +50% +70% +40% +60% +100% +130% +110% +140% +60% +80% +100% +120% * * +10% +20% +20% +30% * The Net profit (loss) is very sensitive to FX variations. Considering today s FX rate of R$1.72/US$, it is expected that the FY 09 net loss will be reverted to net profit in the next fiscal year. 21
Contacts Marcelo Martins CFO and Investors Relations Officer Luiz Felipe Jansen Investor Relations Manager Email: ri@cosan.com.br Site: www.cosan.com.br/ri Phone: +55 11 3897-9797 22
Thank you! Q&A Section 23