Morgan Presentation Sep10x

8/4/2019 Morgan Presentation Sep10x

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Morgan Stanley 13th Annual Latin America Conference

September 13-15, 2010 London


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Disclaimer

The information contained in this presentation may include statements which constituteforward-looking statements, within the meaning of Section 27A of the U.S. Securities Actof 1933, as amended, and Section 21E of the U.S. Securities Exchange Act of 1934, as

amended. Such forward-looking statements involve a certain degree of risk anduncertainty with respect to business, financial, trend, strategy and other forecasts, andare based on assumptions, data or methods that, although considered reasonable by thecompany at the time, may turn out to be incorrect or imprecise, or may not be possible torealize. The company gives no assurance that expectations disclosed in this presentation

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will be confirmed. Prospective investors are cautioned that any such forward-lookingstatements are not guarantees of future performance and involve risks and uncertainties,and that actual results may differ materially from those in the forward-looking statements,due to a variety of factors, including, but not limited to, the risks of international businessand other risks referred to in the companys filings with the CVM and SEC. The companydoes not undertake, and specifically disclaims any obligation to update any forward-

looking statements, which speak only for the date on which they are made.


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Agenda

The Company

Market Positioning

Pulp and Paper Market

4

8

15

3

2Q10 Financials

Synergies

Corporate Restructuring

22

26

28


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4

The Company


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VCP and Aracruz merged to create Fibria

Shareholder Structure

VotorantimIndustrial S.A.

BNDESPar Free Float

29.34% 30.42%1 40.17%

Treasury

0.07%

5

Veracel

50.0%50.0%

Conpacel

1 Position as of August 31, 2010. BNDESPar has 21% linked to a Shareholders Agreement with Votorantim Industrial S.A. during the first 3 years and 10.9% during the following 2 years.

NYSE"FBR"42%

BOVESPA"FIBR3"

58%

Average Trading Volume (2Q10):

US$68 million / day


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Improved Corporate Governance

Migration to BMF&Bovespa'sNovo Mercado Listing Segment:

- 100% tag along rights

- Independent members in the Board

- One class of share: 1 share = 1 vote

Policies approved by the

Board of Directors:- Corporate Governance

- Information Disclosure

- Stocks Trading

Accessibility to Managementby Financial Communities

6

Listed in the Most ImportantSustainability Indexes:

DJSI / ISE

Adoption of InternationalAccounting Practices

Investor Relations Awards:- Top 5 in Financial Disclosure (Latam)

- Top 5 in Best Corporate Sustainability


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Improved Corporate Governance

9 Members: 20% Independent

Chairman: Jos Luciano Penido

Board and Committees

Board ofDirectors

ShareholderMeeting

Fiscal Council

7

CEO: Carlos Aguiar

Audit and Risks

Personnel and Remuneration

Finance

Sustainability

BoardAdvisory

Committees

ExecutiveOfficers


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8

Market Positioning


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Creation of a Winning Player

Competitive StrengthsSuperior Asset Combination

Leadership in Market

PulpScale and Integrated

Operations

Low ProductionCost DNA

Caravelas

BelmonteVeracel

Port Terminal

Pulp Mill

Paper Mill

9

Pulp production capacity: 5.4 million t / year Paper production capacity: 358 thousand t / year Total area: 1.0 million ha1|Eucalyptus plantation: 585 thousand ha1

4 pulp plants; 2 paper plants and operation of 3 port terminals High yield in eucalyptus production (avg 45 m3/ha/year) and certified forests

Short harvest cycle: 6 years vs. 25-70 years in Scandinavia

1 Data as of June 30, 2010. Does not include partnership program which represents 125 thousand ha.

Unique Forestry

Management:Advanced ForestryTechniques and

Short Harvest Cycle

Forest to PortIntegration TroughEfficient Logistics

Strong / ReliableCustomer Base

Modern IndustrialPlants

Trs Lagoas

Conpacel

SantosJacarePiracicaba Aracruz

Portocel


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1.500

Unique Brownfield Potential Growth

Modern Plants

Aracruz IV

Best sites for additional capacity ('000 t)

AracruzCapacity: 2.300Technical age: 9

Average Plant Capacity(000 t)

2.500

2.000TrsLagoas

5.300

Planned Capacity Increase

10

Veracel II(1)

Trs Lagoas II

Losango I

Brownfield Brownfield Greenfield Brownfield

(1) Fibrias 50% stake at VeracelSource: Fibria

1.500

1.000

500

40 30 20 10

RussiaJapan

USASweden

CanadaPortugal

FinlandFranceSpain

ChileSouthAfrica China

Brazil

Indonesia

Uruguay

Technical age of equipment (years)

.Technical age : 0

JacareCapacity: 1.100

Technical age : 5

Veracel (1)

Capacity: 550Technical age : 3

Fibria's Pulp Capacity 1979 - 2009 CAGR: 3.6% Expansion

750

1.500

1.500


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Fibria has the best sites ready to duplicate capacity

5,400750

1,500

1,500

1,500 10,650

Veracel IITrs Lagoas II

Losango

Aracruz IV

Capacity expansion ('000 t) Status of expansion projects

Trs Lagoas II

Capacity: 1.5 million tons

Forest base:

- Need: 150,000 ha-TLS I surplus: 30,000 ha

- Leasing: 45,000 ha in 2010

11

Fibria 2010 Brownfield Brownfield Greenfield Brownfield Fibria 2025

Social-environmental licensing process initiated

Feasibility study to start in 2011

Startup slated for 2014

Veracel II

Capacity: 1.5 million tonsNegotiations with partner in progress


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Tembec

Botnia

Sodra

CMPC

APRILArauco

Fibria

Leadership in the Global Market Pulp Sector

Pulp Production Capacity

2009 ('000 t)

1st

~ Twicethe size

5,400

Market Share1

3%11%

12

0 1.000 2.000 3.000 4.000 5.000 6.000

Stora Enso

Cenibra

West FraserMercer

ENCE

Georgia Pacific

Ilim

IP

Domtar

Canfor

APP

Weyerhaeuser

Bleached Hardwood Kraft Pulp (BHKP)

Bleached Softwood Kraft Pulp (BSKP)Unbleached Kraft Pulp (UKP)

Mechanical

Source: PYRY, 2007 / As for Market Pulp: Pulp and Paper Products Council (PPPC) 2009 and Fibria.1 Market Share estimated considering 2009 nominal capacity

Total Pulp:188 million t

Total Hardwood Pulp:25 million t

Total Market Pulp:48.5 million t

Total Eucalyptus Pulp:17 million t

22%

32%


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Low Production Cash Cost DNA

Cash Cost1 US$/t

284 310

320225

199152 113

238 161

118133

151 155

468437

436 423

475

416 393

296266 255 2502

Hardwood Cash Cost (US$/t) vs Capacity ('000 t)

300

400

500

600

US$/ton

Iberia

13

155238

178232

178

133 104 95

Wood Others

Iberia

1 Source: Hawkins Wright Estimate 2Q10

2 Fibria 2Q10 Cash cost without downtimes

0

100

200

0 2.000 4.000 6.000 8.000 10.000 12.000

250

Capacity ('000 t)


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Long Term Relationship With Key Clients

Global Footprint

Supplies customized pulp products to specific paper grades

Sole supplier to key customers focused on eucalyptus pulp to the tissue market

Top 10 main customers represent on average 65% of sales

P&W

Tissue

Specialty

Uses of Fibrias Pulp 2Q10

Europe38%

Switzerland

53%26%

21%

14

NY004GAK_1.worNY004GAK_1.worNY004GAK_1.worNY004GAK_1.worNY004GAK_1.worNY004GAK_1.worNY004GAK_1.worNY004GAK_1.wor

1 Sales destination as of 2Q10.

North America

27%Asia24%

Brazil11%

Beijing

SalesDestination1

Miami Hong Kong

Hungary

Subsidiaries Representative officesHeadquarters


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15

Pulp and Paper Market


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Shipments to Capacity Ratios and Inventories

World P&W paper shipments to capacityWorld market pulp shipments to capacity

88%

82%

88%

82%

78%

90%

79%

90%92%

95%

86%

93%

90%91%92%

89%89%89%

86%

94%96%

92%

85%

93%

85%

08

08

08

08

08

08

09

09

09

09

09

09

09

09

09

09

09

09

10

10

10

10

10

10

10

92%90%

87%

95%

91%

85%

79%

76%

79%80%80%78%

82%83%81%

89%88%88%

84%82%

88%89%

88%86%

85%

8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 9 910

10

10

10

10

10

10

16

Ju

l-

Aug-

Sep-

Oc

t-

Nov-

Dec-

Jan-

Fe

b-

Mar-

Apr-

May-

Jun-

Ju

l-

Aug-

Sep-

Oc

t-

Nov-

Dec-

Jan-

Fe

b-

Mar-

Apr-

May-

Jun-

Ju

l-

Ju

l-

Aug-

Sep-

Oc

t-

Nov-

Dec-

Jan-

Fe

b-

Mar-

Apr-

May-

Jun-

Ju

l-

Aug-

Sep-

Oc

t-

Nov-

Dec-

Jan-

Fe

b-

Mar-

Apr-

May-

Jun-

Ju

l-

World pulp consumers' days of supplyWorld pulp producers' average days of supply

Source: PPPC Global 100 Chemical Market Pulp Source: PPPC Global 100 P&W

Source: PPPC Global 100 Total Chemical Pulp Producers' stock

20

15

20

25

30

35

Apr-0

5

Nov-0

5

Jun-0

6

Jan-0

7

Aug-0

7

Mar-0

8

Oct-0

8

May-0

9

Dec-0

9

Jul-1

0

29

10

20

30

40

50

Apr-0

5

Nov-0

5

Jun-0

6

Jan-0

7

Aug-0

7

Mar-0

8

Oct-0

8

May-0

9

Dec-0

9

Jul-1

0

days

days

Source: PPPC Global 100 Total Chemical Pulp Consumers' stock


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Industry Outlook

China: Eucalyptus pulp shipments ('000 t)Market pulp: world demand growth (%)

264196 204

161128

151

268

495

296

356

518

412

340355 350

363

293266

331

280210

276267

191235251

203

-08

-08

l-08

-08

-08

t-08

-08

-08

-09

-09

r-09

r-09

-09

-09

l-09

-09

-09

t-09

-09

-09

-10

-10

r-10

r-10

-10

-10

l-10

0%

9% 10%

18%15%

-27%Total North America Europe Latin America Japan China

Average

240 ktons

Average

347 ktons Average

233 ktons

17

Ma

Ju J

u

Au

Se

Ou

No

De

Ja

Fe

Ma

Ap

Ma

Ju J

u

Au

Se

Oc

No

De

Ja

Fe

Ma

Ap

Ma

Ju J

u

Announced list pulp priceEuropean List Price (BHKP) x Commodity Index (CRB)

Source: Fibria

Source: PPPC Global 100 World Chemical Market Pulp Source: PPPC Global 100

7M2010 x 7M2009

List price (as of September/2010):

North America: US$900/t Europe: US$870/t Asia: US$800/t

Source: CRB (Commodity Research Bureau) Bloomberg | BHKP: FOEX

US$840/tUS$920/t

300

400

500

600

700800

900

1.000

250

350

Jan-0

8

Mar-

08

May-0

8

Ju

l-08

Sep-0

8

Nov-0

8

Jan-0

9

Mar-

09

May-0

9

Ju

l-09

Sep-0

9

Nov-0

9

Jan-1

0

Mar-

10

May-1

0

Ju

l-10

CRB BHKP List Price

European

ListPrice

(US$/t)

BHKP

Commo

dity

Price

Inde

x(CRB)

Aug-1

0


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24.8

28.3

1.6

1.40.2 0.3

30.1

28.0

1.3

0.6 0.3 -0.1

Asia4.5% p.a.

Europe5% p.a.

USA

2% p.a.

Others

2% p.a.

Expected Supply x Demand Balance1 Market Pulp BHKP (million t)

Rizhao(3Q10/2011) FibriaTLS (2010)

JBSEldorado(4Q12)

Others2

Pulp Supply x Demand Balance Expected to Remain Tight

18

2009 BHKPDemand

Asia Europe USA Others 2012 BHKPDemand

2009 BHKPDemand

Asia Europe USA Others 2012 BHKPDemand

2009 BHKPDemand

2009 BHKPSupply

OR3:94%

OR3:89%

2012 BHKPDemand

2012 BHKPSupply

1 Source: PPPC / Fibria2 Capacity changes3 OR: Operating rate

+3.5 MT +2.1 MT

Demand Supply


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P&W Capacity Changes

Company / Mill Effective Date '000 t

Puyang Longfeng Jan 2009 350

Tralin, Gaotang Feb 2009 150

MCC Yinhe Paper Jul 2009 200

Yeuyang Paper Oct 2009 200

Fujian Nanping Paper Oct 2009 200

Yeuyang Paper 2010 200

Fujian Nanping March 2010 100

Sun Paper/IP March 2010 350

2009 = 1.1 million t

Company Region/Date '000 t

M Real Europe/2009 320

International Paper Europe/2009 250

Others Europe/2009 455

International Paper North America/2009 200

Others North America/2009 230

Stora Enso Europe/2010 210


P&W paper capacity withdrawals 2009-20101 China: P&W paper capacity changes 2009-20131

19

Guangxi Yongkai Sugar April 2010 200

APP, Hainan Island May 2010 1,200

Lee&Man 1H 2010 200

Jiangsu Oji Paper Q32010 400

Shandong Huatai late 2010 150

Guangxi Jindaxing December 2010 200

Guangxi Yongkai Sugar 2011 200

China Metalurgical Meili Paper Q1 2011 300

Shandong Huatai Paper Q1 2011 500

Shandong Chenming Q1 2011 1,250

Guangxi Huajin Group late 2011 340

Sun Paper Q1 2011 300

Nine Dragons late 2011 450

April early 2012 450

April early 2013 450

Total P&W capacity changes in China 8,400



Others Europe/2010 80

Domtar North America/2010 415

International Paper North America/2010 340

Others North America/2010 280

Total P&W capacity withdrawals in Europeand North America

3,000


1 Source: TerraChoice July 2010

2012-13 = 0.9 million t


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Chinas Presence in the Market Pulp Sector

+59%

+107%3.000

4.000

5.000

6.000

7.000

2008 2009 Growth

China's Hardwood imports of BHKP by country1 China's share of market pulp (%)2

26%

22%10%

12%

14%

21%

6.000

8.000

10.000Eucaplyptus Hardwood Total

000t

000t

Pulp Shipments (000) and Market Share (%)

20

+2%

+51%+12%

+117%+38%

+151%+142% +2%

0

1.000

2.000

BHKPTotal

Brazil

Indonesia

Chile

Russia

Uruguay

Canada

USA

Others

Thailand

Brazil is the leading exporter of BHKP toChina, accounting to approximately 41% ofChina's total imports in 2009.

Between 2005 and 2009, the Chinese marketshare of eucalyptus shipments increased by17 p.p. (total market pulp: +11 p.p.)

2 Source: PPPC W20. Coverage for chemical market pulp is 80% of world capacity.

9% 11%13%

16%

7% 9%10% 12%

0

2.000

.

2005 2006 2007 2008 2009

1 Source: Hawkins Wright


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10

15

20

25

30

China Paper&Board Production and Consumption1 Per Capita Consumption of Tissue by World Region2

Kg / capita

20

30

40

50

60

70

40

60

80

100

120

Benefiting From Chinas Growth

in million tons kg/person/yr

21

0North

AmericaWest

EuropeJapan Oceania LatAm East

EuropeChina Africa

1 Source: China Paper Association.

0

10

0

20

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Consumption Production Per Capita

Chinese consumption of high quality tissue paper has a huge potential upside, as GDP per capitaincreases.

2 Source: RISI


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22

2Q10 Financials


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2Q10 Performance

Pulp sales mixKey figures

2Q10 1Q10 2Q09 2Q10vs1Q102Q10

vs2Q09

Pulp Production (1000t) 1,208 1,314 1,334 -8% -9%

Pulp Sales (1000t) 1,253 1,322 1,349 -5% -7%

Paper Producton (1000t) 79 77 94 3% -16%

Paper sales (1000t) 87 83 104 6% -16%

Net Revenue (R$ million) 1,809 1,675 1,471 8% 23%

Adjusted EBITDA (R$ million) 730 637 389 15% 87%

EBITDA Mar in % 40% 38% 26% 2 . . 14 . .

21%

32%

37%

9%

2Q09

27%

39%

23%

11%

1Q10

North America Europe Asia Brazil/Others

27%

38%

24%

11%

2Q10

23

EBITDA (R$ million) and EBITDA Margin (%)Cash cost (R$/t)

389

637

730

2Q09 1Q10 2Q10

. . . .

Financial Income (R$ million) (315) (341) 1.369 - -

Net Income (R$ million) 130 9 920 1,341% -86%

26%

38% 40%

418

499

440

1Q10 2Q10 2010E

449

2Q10 w/odowntimes

Source: Fibria


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Debt

Debt indicators

(R$ million) 2Q10 1Q10 2Q09 2Q10 vs

1Q102Q10 vs

2T09

Gross Debt 13,209 13,540 16,145 -2% -18%

Cash 2,364 2,684 2,953 -12% -20%

Net Debt 10,846 10,856 13,192 - -18%

4762

70

2Q09 1Q10 2Q10

(1)Does not include the debt to former Aracruz shareholders

Average maturity(1) (months)

7.2

5.64.7

Jun-09 Mar-10 Jun-10

Net Debt / EBITDA(2) (x)

(2)Last 12 months EBITDA

24

Debt amortization schedule (R$ billion) Debt by currency and type

1.6

4.6

2.1

1.41.7 1.7

1.1

1.9

1.1

1.9

0.91.3

1.8

1.2

5.1

2009 2010 2011 2012 2013 2014 2015 2016-2020

Jun-09 Jun-10

71% 29%

Gross debt by currency

Foreign Local

1 Amortization schedule as of Jun/20092 Amortization schedule as of Jun/2010

1 2

37%

27%

13%

14%

3%6%

Gross debt by type

Pre-payment Bonds

Former Aracruz shareholders BNDES

NCE Others

Short-term debt:

from 34% in Jun/09

to16% in Jun/10


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Financial Turnaround

Liability Management

Achievements 2Q09 2Q10

Leverage (Net Debt / EBITDA) 7.2x 4.7x

Cost of Foreign Debt 7.1% p.a. 6.0% p.a.

Average Maturity (months) 47 70

Collateral Debt (% of total debt) 43% 16%

Access to Capital Markets Amount

Eurobond Fibria 2019 @ 9.25% p.a. US$ 1 bi

Eurobond Fibria 2020 @ 7.5% p.a. US$ 750 mi

Pre Export Payment @ 3month Libor + 4.00% p.a.(tranche 1) US$ 750 mi

Pre Export Payment @ 3month Libor + 4.25% p.a. (tranche 2) US$ 425 mi

25

Derivatives debt US$ 2.6 bi -

Net Debt R$ 13.2 bi R$ 10.8 bi

Pre Export Payment @ 3month Libor + 2.8% p.a. US$ 600 mi


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26

Synergies


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Synergies

Net Present Value of the synergies (R$ billion)

3,4

4,24,3 4,52Q10 status:

108% of theprojected curve

27%21%

2%Industrial

- Cost reduction ofchemicals and energy

Supply Chain

- Reduction of shipping cost

- Optimization of logistics

Others

2.0

27

Accumulated Estimated

0.5

1.4

,

dec/09 2Q10 dec/10 2011 2012 2013 2014

23%16%

11% - Production increase

Forestry

- Reduction of forestry costs

- Best practices in R&D

SG&A

Tax

0.5


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28



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Event Date

Acquisition by VCP of additional 28% of Aracruz common shares Jan 20, 2009

VCP Capital Increase Apr 14, 2009

VCP conversion of prefered into common shares Jun 12, 2009

Tender Offer for Aracruz common shareholders Jul 02, 2009

Incorporation proposal for the 0.1347 ratio Aug 24, 2009

29

,

Shareholderes Agreement - VID and BNDES Oct 29, 2009

End of withdrawal rights period Nov 12, 2009

End of Aracruz trading Nov 17, 2009

Fibria trading start (Bovespa: FIBR3 / NYSE: FBR) Nov 18, 2009

Approval of the merger of Aracruz into Fibria Dec 22, 2009

Migration to Novo Mercado listing segment at BM&FBovespa May 20, 2010


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Investor Relations Team:

Joo Elek IROAndr Gonalves General Manager

Fernanda Naveiro Vaz

Anna Laura Linkewitsch

Roberto Costa

Phone: +55 11 2138-4565

Email: [email protected]

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