3Q15 Results Presentation3Q15 Results Presentation PULP AND PAPER 2 The statements in this...

3Q15 Results Presentation

PULP AND PAPER

2

The statements in this presentation constitute projections or forward-looking

statements. Such statements are subject to known and unknown risks and

uncertainties that could cause the expectations expressed to not materialize

or the actual results to differ materially from the expected results. These risks

include changes in future demand for the Company’s products, changes in

factors that affect domestic and international product prices, changes in cost

structures, changes in the seasonality of markets, pricing actions by

competitors, foreign currency fluctuations and changes in the political and

economic environments in Brazil, in emerging markets or internationally.

Disclaimer

3

Agenda

1. Results

2. Strategy

4

Record figures in 3Q15…

Record-high Adjusted EBITDA of R$1.48 billion in 3Q15, margin of 49%

Lowest level of SG&A expenses as a ratio of net revenue: 7.4% in 3Q15

New round of liability management

Net debt/Adjusted EBITDA ratio of 3.0x

Interim dividends of R$120 million

OPERATING CASH GENERATION¹ LTM² (R$ billion)

1.1 1.2 1.2 1.31.5

1.92.2

3.0

Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15

Note: (1) Operating cash generation in the last 12 months considers Adjusted EBITDA less sustain CAPEX(2) Last 12 months

5

804 929

2,161 2,530 328 315

979 926

1,132 1,245

3,1393,456

3Q14 3Q15 9M14 9M15Pulp Paper

... are record-high in the quarter

Low global BHKP inventories

Growing pulp demand

Production resumed at line 1 of Mucuri mill after downtime

Sales (‘000 tons)Production (‘000 tons)

Pulp production and sales…

860 889

2,022 2,551

340 335

948

903

1,200 1,224

2,9693,454

3Q14 3Q15 9M14 9M15Pulp Paper

Increase in paper exports

Brazil’s paper demand: -14% yoy

Dumping taxes to be revised in January/16

6

Cash cost still impacted by wood supply in Mucuri mill…

…trending towards gradual recovery in 2016

37%

51%504

560

460

480

500

520

540

560

580

0%

20%

40%

60%

Consolidated Cash Cost Ex-Maintenance Downtime (R$ / ton)

Average distance of market wood in Mucuri (Km) Market wood in Mucuri (%)

2Q15 3Q15

626

66856

(14)

2Q15 Wood Other 3Q15

7Note: (1) last twelve months

COGS LTM¹ (R$/ton)

SG&A / Net Revenue LTM¹ (%) Adjusted EBITDA Margin LTM1 (%)

6,7487,265

8,012

8,686

9,692

Sep/14 Dec/14 Mar/15 Jun/15 Sep/15

9.8%

9.5%

9.0%8.8%

8.5%


Net Revenue LTM¹ (R$ million)

1,293 1,2841,265

1,2851.316


32.1%33.8%

36.1%

38.4%

43.3%


+1.8%

Results improved through…

...discipline of costs and expenses

Inflation: +9.1%

8

Improving results even when excluding…

1,260 1,349 1,459 1,631 1,781 1,944 2,057 2,1692,452

2,8953,333

4,194

DEC/12 MAR/13 JUN/13 SEP/13 DEC/13 MAR/14 JUN/14 SEP/14 DEC/14 MAR/15 JUN/15 SEP/15

641 670 715 772 820 863 899 9501,036

1,1541,233

1,378

DEC/12 MAR/13 JUN/13 SEP/13 DEC/13 MAR/14 JUN/14 SEP/14 DEC/14 MAR/15 JUN/15 SEP/15

...the FX variable

Increase of +115%

Increase of +233%

Adjusted EBITDA LTM (R$ million)

Adjusted EBITDA LTM (US$ million)

9

Investments in structural competitiveness…

...with high returns and low risk

Suzano Digester: Completed in 2Q15

Limeira Digester: 4Q15

Energy Efficiency Programs: To be concluded in 4Q15

Retrofitting of Harvesting Equipment: Conclusion in 4Q15

Forest Logistics (light-duty trucks): 4Q15

Biomass Boiler in Limeira: 1Q16

Fluff: Start-up in December/15

0.8 1.1

0.50.7

1.3

9M15 2015e

Retrofitting

Sustain

Capex (R$ billion)

1.8

10

Debt reduction...

...allows strategy to go forward

Net Debt/ Adjusted EBITDA (x)

Liability Management surpasses R$4 billion in

2015 and enables reduction in cost of debt

Average Cost of Debt (%)

84.2%

91.2%

94.4%

Sep/15

Dec/14

Dec/13

4.0%

4.7%

4.8%

5.2x

4.1x

3.0x

4.8x

3.7x

2.3x

Dec/13 Dec/14 Sep/15

BRL USD

Note: Debt in BRL as a percentage of CDI

BRL USD

11

Agenda

1. Results

2. Strategy

12

STRUCTURAL COMPETITIVENESS

Maximizing returns on our assets and cash generation

Benchmark in operating efficiency

ADJACENT BUSINESSES

Increase profitability through innovative, paradigm-shifting

businesses

RESHAPING OF THE INDUSTRY

Decrease the industry’s return variability

Strategy to maximize return on assets...

...and increase value to shareholders

13


ADJACENT BUSINESSES




14

Project 5.1...

...brings us closer to optimum structural cost

Capacity of 5.1 million tons in 2018

Industrial investment in Imperatriz and Mucuri mills

Forestry basis expansion and average distance reduction

Lower cash cost: lower chemicals consumption and fixed cost dilution

Total estimated capex: R$1.14 billion with estimated IRR of 47%

2016e: R$510 million


2018e: R$45 million

Project conclusion scheduled for 4Q17 with gradual increasein capacity

15




ADJACENT BUSINESSES


16

Tissue: operating and logistics competitiveness…

...adding value to pulp

Production of jumbo rolls for companies in the industry and/or finished product

Priority in establishing industrial partnership with our clients

Faster market growth in Brazil’s North/Northeast regions

Structural and definitive solution to monetize ICMS tax credits

Modern and integrated plants in Imperatriz and Mucuri

Production capacity of 60k tons in each unit

Total estimated capex: R$425 million with IRR of 81%



2018e: R$50 million

Start up: 3Q17 in Imperatriz and 4Q17 in Mucuri

17

BETTER EVERYDAY

STRONG AND KIND

3Q15 Results Presentation3Q15 Results Presentation PULP AND PAPER 2 The statements in this...

Documents

Transcript of 3Q15 Results Presentation3Q15 Results Presentation PULP AND PAPER 2 The statements in this...