Press release Lille, 10 March 2010 Sharp rise in operating profitability at Tereos in 2008/09 driven by a strong performance by diversification activities Sales of 3.3 billion Sharp rise in EBITDA to 429 million Continued expansion in Brazil and La Réunion. Strengthened partnership with cereal cooperatives Improved financial structure and ongoing debt reduction Outlook for 2009/10: EBITDA in excess of 500 million In 2008/09, in a difficult economic environment affected by volatile commodity prices and the end of the European Sugar Regime reform, the Tereos group reported a sharp rise in EBITDA and margins despite lower sales, driven by a solid performance in cereals processing in Europe and sugarcane processing in Brazil. Philippe Duval, Chairman of Tereos' Management Board, said: "In an environment that continues to be impacted by the economic crisis and highly volatile commodity prices, exchange rates and oil prices, the Tereos group reported a sharp rise in operating income while continuing to reduce debt. Our strong positions in sugar and alcohol in Europe, our diversification into cereals processing, the strengthening of our positions in Brazil and our expansion in La Réunion mean that we can look forward to the future with confidence. With the backing of our cooperative partners, cereal partners and financial partners, Tereos should continue to improve its operating performance in 2009/10. The Group is well set to become a key player in the current wave of consolidation in the agrifood business." 1
Financial performance m 2007/08 2008/09 Change Sales 3,585.5 3,309.2-7.7% EBITDA 358.3 429.0 +19.7% EBITDA margin 10.0% 13.0% +3 pts Net income (after price complements 1 ) 204.0 76.8-62.3% Net debt 1,684 1,591.3-5.5% The Tereos group reported consolidated sales of 3,309.2 million in 2008/09 compared with 3,585.5 million in 2007/08, a limited fall of 7.7%. In Europe, Sugar & Alcohol sales fell by 5.9%, mainly due to lower benchmark prices in the European Union. Sales in the starch business fell by 17.7% under the combined effect of a shrinking market, lower prices and difficult conditions in the non-food sector. In Brazil, Sugar & Alcohol sales rose by 19.7% as a result of higher prices over the period. Consolidated EBITDA before price complements amounted to 429.0 million compared with 358.3 million in the previous period, a rise of 19.7% driven by a strong contribution from diversification activities, especially the group's cereals processing activities in Syral and BENP Lillebonne. While EBITDA at Tereos France remained stable at 153 million, EBITDA at Syral rose by 33.7% to 156 million over the period as a result of good positioning on high-margin products and cost controls coupled with a fall in cereals prices. Guarani in Brazil also contributed to the overall rise, reporting an increase in operating income to 67 million, while EBITDA at TTD in the Czech Republic rose to 25 million. Overall, diversification activities accounted for 61% of the group's sales and 64% of EBITDA. The EBITDA margin rose from 10% in 2007/08 to 13%. Current operating income before price complements rose sharply from 200.3 million in 2007/08 to 248.2 million in 2008/09. Net financial expenses totalled 164.3 million at 30 September 2009, 9.6 million lower than in 2007/08. The improvement reflects a decline in the group's net debt and lower interest rates. After price complements, consolidated net income amounted to 76.8 million compared with 204.0 million in the previous period. It should be noted that the figure for 2007/08 included exceptional income arising from compensation payments to Tereos France under the voluntary quota surrender plan. 1 Price complements: price supplements per tonne of sugar beet paid to cooperative partners 2
Ongoing debt reduction The group had a net debt/ebitda ratio of 3.71 in 2008/09 compared with 4.7 in the previous period. The Group is well within its banking covenants. Improved cash flow and reduced capital expenditure enabled the Tereos group to cut its net debt to 1,591.3 million, 5.5% lower than at 30 September 2008. Tereos France For the 2008/09 campaign, Tereos France had a quota of 1,188,000 tonnes. Sugar sales for all activities totalled 1,634,000 tonnes due to additional non-quota sales to export markets, the chemical industry and the yeast industry. Sales to the food industry in Europe are broadly stable. 66% of quota sugar sales to the food industry are outside of France. Sales of table sugar have risen significantly following an upturn in consumption. Alcohol sales fell slightly due to the effect of the economic crisis on our principal markets. The 2009/10 campaign was exceptional for Tereos France, with an excellent average yield of 94 tonnes per hectare at 16%, due in particular to favourable weather conditions. Tereos France's nine plants processed 15.5 million tonnes of sugar beet, 15% more than in 2008/09. With equilibrium on the market restored after the reform, it has been possible to reconstitute sales margins on quota activity. The opening of an export quota for non-quota sugar enabled the company to sell its entire surplus output on a global market characterised by shortages. Alcohol and ethanol sales have risen since the start of 2009/10. Cereal processing The European market for starch products fell by 6.8% in 2008/09, mainly in non-food sectors like the paper/paperboard and chemical industries. Faced with shrinking markets and falling commodity prices, the price of starch products also fell. In this context, Syral saw its sales of starch products decline but maintained its overall market share of 17% in a favourable overall trend. In the alcohol and bioethanol segment, Syral is consolidating its position as the leading supplier of high-quality grain alcohol for spirits and has seen its sales rise by over 30%. International In the Czech Republic (TTD), average yields reached record levels and the Dobrovice sugar plant and distillery ran at full capacity, confirming its position as Central Europe's leading facility. In Brazil, the 2009/10 campaign was marked by a surge in global sugar prices, dampened in Brazil by the appreciation of the real against the dollar. As a result of abundant rainfall, yields in terms of tonnes of sugarcane per hectare rose by 15%, though the sugar content, traditionally high in the Guarani region, fell by 6.5%. 3
Overall, Guarani's cane plantations increased by 11,400 hectares in the 2009/10 campaign to 217,600 hectares and Guarani processed 13.6 million tonnes of sugarcane in its five Brazilian plants over the period. This was similar to the figure in the previous period, due to an extended campaign which made up for the many stoppages caused by rain. Guarani's sugar production fell by 14% to 940,000 tonnes due to the lower sugar content of the processed canes. Bioethanol production fell by 5% to 472 000 m3. In Mozambique, sugar production fell from 66,000 tonnes to 37,000 tonnes due to an exceptional drought during the 2009 campaign. Programmes to replant sugarcane and irrigate plantations are under way. The 2009 campaign in La Réunion was successful, yielding a harvest of 1,907,600 tonnes of sugarcane and 207,500 tonnes of sugar, compared with 194,000 tonnes in 2008. Events after 30 September 2009 In order to meet growing demand for high-quality grain alcohol from the spirits industry, Syral is building a new distillery at Selby in the UK. Situated in the heart of a wheat-producing area, the distillery will benefit from appropriate logistical connections and favourable industrial infrastructure. BENP's former plant at Origny has been relaunched as Distillerie de la Vallée de l'oise, producing high-quality grain alcohol for Bacardi. In February 2010, Guarani concluded an agreement alongside the Humus Group to acquire a 50% stake in Usina Vertente Ltda. The two partners will jointly operate the plant, which has a crushing capacity of 1.7 million tonnes of sugarcane and is located near Guarani's other factories. Vertente will produce about 117,000 tonnes of sugar and 72,000 m3 of bioethanol in the 2010/11 campaign. Guarani will bring a sugar plant into production on the site of the Tanabi distillery in 2010, producing 120,000 tonnes of sugar in a full year. At the end of 2009, Tereos concluded a preliminary agreement for the acquisition of a majority stake in Société Sucrière du Quartier Français, the holding company of the Quartier Français group. The Quartier Français group's sugar division produces 150,000 tonnes of sugar on La Réunion and 80,000 tonnes in Tanzania, in partnership with a Mauritian sugar producer. Tereos' sugar plant on La Réunion (Sucrerie de Bois-Rouge) together with that of the Quartier Français group (Sucrerie du Gol) will have a combined production capacity of 210,000 tonnes. The transaction will contribute to the consolidation and development of the cane/sugar/energy industry on La Réunion and to Tereos' refining and marketing activities in Europe and make Tereos Europe's biggest producer of cane sugar. The Tereos group has recently strengthened its links with its historical partners, the cereal cooperatives which, now grouped together within a single entity, Tereos Agro-Industrie, will be directly involved in the group's strategic decisions. 4
Outlook In a brighter environment across all its end markets, the Tereos group expects to see a further improvement in its operating performance in 2009/10, with EBITDA in excess of 500 million, once again demonstrating the resilience of the cooperative model and the wisdom of Tereos' long-standing diversification strategy. Acquisitions like those of Quartier Français in La Réunion and Vertente in Brazil will make a positive contribution to the group's performance. The group will also continue to improve its financial structure and reduce its debt. 5
About Tereos, a global producer of sugar, starch and alcohol Tereos is a cooperative agro-industrial group that specialises in the primary processing of sugar beet, sugarcane and cereals. Thanks to the commitment of the 12,000 French farmers who are its cooperative partners, the Tereos group has expanded considerably over the last twenty years, increasing its total production of sugar, starch and alcohol by a factor of 50. This expansion enables Tereos to respond to the challenge of increasingly international markets and volatile commodity prices. Its 33 production facilities in Europe, South America and Africa offer long-term outlets for 900,000 hectares of cultivated farmland. Tereos has a workforce of 13,500 permanent employees involved in producing and processing sugar beet, sugarcane and cereals and marketing a comprehensive range of sugars, starches and bioethanol, along with by-products used for animal feed and power generation. Thanks to its ability to anticipate future developments, its expertise, technological skills and knowledge of its markets, Tereos is now one of the world's leading players in its business areas. True to its long-term vision of agriculture, Tereos creates value from the natural resources it processes while reducing its environmental impact and offering employees a pleasant working environment. www.tereos.com Key figures 12,000 cooperative partners 13,500 permanent employees 900,000 hectares of cultivated farmland 33 industrial facilities 3,000,000 tonnes of sugars 1,800,000 tonnes of starch-based products 1,500,000 m3 of alcohol and ethanol 3.3 billion in total sales Press contact Tereos Philippe Pelzer Tel: +33 (0)3 28 38 79 51 ppelzer@tereos.com Brunswick Agnès Catineau / Benoît Grange Tel: +33 (0)1 53 96 83 83 tereos@brunswickgroup.com 6