Release 1Q16
Transcript of Release 1Q16
NET REVENUE
R$1,463 million SALES VOLUME
4% growth ADJUSTED EBITDA
R$512 million INVESTMENTS
R$853 million PUMA PROJECT
Start of operations
Net revenue of R$1,463 million, up 12% over 2015, even with the deterioration of markets in Brazil.
Total sales of 455 thousand tons, 4% increase in the quarter, highlighting the growth of 13% in exports and the sales stability in Brazil even in a challenging scenario, showing Klabin's agility in positioning itself in different market scenarios.
In the 19th consecutive quarter of uninterrupted growth,
the Adjusted EBITDA totaled R$512 million for the quarter, up 11% over the same period in 2015, without yet including the pulp sales from the Puma Project. The EBITDA Margin was 35%.
1Q16 investments totaled R$853 million, with R$734
million directed towards the new pulp plant. The new pulp plant in Ortigueira (PR), the Puma Unit,
launched operations on time and on budget, and on March 4, 2016, produced the first bleached pulp bales, marking a new phase in the Company’s existence.
ADJUSTED EBITDA REACHES R$512 MILLION IN 1Q16, UP 11% OVER 1Q15, AND MARKS 19TH CONSECUTIVE QUARTER OF GROWTH.
PUMA UNIT STARTS OPERATIONS
March 31, 2016
Klabin Market Cap R$23 billion KLBN11 Closing Price R$19.37 Daily traded vol. 1Q16: R$63 million
Conference Call Portuguese (with simultaneous translation) Friday, 4/29/16, 11h00 (Brasília) Phone: (11) 3193-1133 - Password: Klabin http://cast.comunique-se.com.br/Klabin/1Q16
IR Antonio Sergio Alfano Tiago Rocha Brasil Daniel Rosolen Marcos Maciel Lucia Reis Natasha Utescher Albert Shih Liu
www.klabin.com.br/ri [email protected]
+55 11 3046-8401
1Q16 HIGHLIGHTS
EARNINGS RELEASE – 1Q16
APRIL 28, 2016
1Q16 EARNINGS RELEASE
APRIL 28, 2016
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∆ ∆
1Q16/4Q15 1Q16/1Q15
Sales volume (thousand tonnes) 455 499 437 -9% 4% 455 1,833
% Domestic Market 64% 62% 67% 2 p.p. -3 p.p. 64% 66%
Net Revenue 1,463 1,596 1,308 -8% 12% 1,463 5,688
% Domestic Market 65% 62% 70% 3p.p. -5 p.p. 65% 68%
Adjusted EBITDA 512 603 461 -15% 11% 512 1,975
Adjusted EBITDA Margin 35% 37% 35% -2 p.p. 0 p.p. 35% 34%
Net Income (loss) 1,074 521 (729) 106% n/a 1,074 (1,253)
Net Debt 12,009 12,411 7,440 -3% 61% 12,009 12,411
Net Debt / EBITDA (LTM - BRL) 5.9x 6.3x 4.2x 5.9x 4.2x
Capex 853 1,364 1,000 -37% -15% 853 4,627
2016 2015R$ million 1Q16 4Q15 1Q15
FINANCIAL HIGHLIGHTS
THE BEGINNING OF A NEW KLABIN On March 4
TH, exactly within the deadline and budget established when the project was approved in 2013, the
Company produced the first pulp bales at the Puma Unit, in Ortigueira (PR). With the plant, Klabin begins a new
stage in its history, moving into new markets and becoming the only Brazilian company to simultaneously provide
bleached pulps from hardwood, softwood and fluff produced in a mill entirely designed for this purpose.
The Puma Unit reinforces Klabin’s commitment to the best global sustainability practices by combining high forestry
productivity, low operating costs, efficient logistics and cutting-edge environmental technology, ensuring highly
competitive end products. Coupled with its vocation for manufacturing paper and packaging, the new plant enables
a new growth cycle and represents Klabin’s ability to dream and achieve.
It is important to remember that the first sales from this new unit took place during the month of April and further
details will be included in a chapter about Pulp in the Quarterly Report for the second quarter.
Klabin's consolidated financial statements are presented in accordance with International Financial Reporting Standards (IFRS), as determined by CVM Instructions 457/07 and 485/10. Vale do Corisco’s information is not consolidated, being represented in the financial statements by equity income. Adjusted EBITDA is in accordance with CVM Instruction 527/12. Notes: Due to rounding, some figures in tables and graphs may not result in a precise sum. The EBITDA margin includes the effects of Vale do Corisco. LTM - last twelve months
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SUMMARYThe sharp deterioration of the Brazilian economy over
the last year continued into the beginning of 2016. As
the economy awaits a solution to the political crisis
that has generated high volatility in the equity and
foreign exchange markets, continued to decline, with
rising unemployment, reduced investment and
inflation still at high levels.
Externally, the central banks of the world's major
economies have maintained low interest rates, which
brought greater liquidity to global markets and a
consequent depreciation of the dollar, especially in
March. In this joint effort to return to the path of
economic growth, the main commodities prices
stabilized earlier this year after the significant
reduction seen throughout 2015.
The deterioration of activity levels in the Brazilian
economy continued to impact the paper and
packaging markets in the first quarter of the year. The
Brazilian Corrugated Board Association (ABPO)
indicated in its previous report from March a 5%
decline in corrugated board shipments in 1Q16,
compared to the same period in 2015.
Meanwhile in the international packaging paper
market, despite the recent decline in the kraftliner list
price in Europe, the average price of €571/t (FOEX) in
1Q16 was the same as in 1Q15. This stability in
international prices, coupled with a higher average
exchange rate compared to the same period in 2015,
ensured strong profitability from sales to export
markets.
In 1Q16, the total sales volume reached 455 thousand
tons, up 4% over 1Q15, due to increases in paper
production capacity made over 2015. Using the agility
and flexibility of the product line, Klabin allocated
most of this additional production for export, taking
advantage of the still favorable conditions in these
markets, even with the recent appreciation of the real
in March and a very challenging international
environment. In the domestic market, the total
volume in relation to the same period last year
remained stable, demonstrating the company's
competitiveness in an adverse scenario and the
resilience of the markets served by Klabin. As a result
of the increase in sales volume, the more
undervalued real versus 1Q15 and Klabin’s
competitiveness in the domestic market, net revenue
in the period totaled R$1,463 million, up 12% over
the same period last year.
Regarding the cost lines in the first quarter of 2016,
the increase in the cash cost per ton was below the
inflation recorded in the same period. The Company's
efforts to control costs, the dilution of fixed costs
through the higher sales volume and the
normalization of electricity prices more than offset
the impact of inflation that still persists on some
inputs and services contracted by Klabin.
It is worth noting that in the first quarter of 2016
Klabin was focused on the successful start of
operations at its new pulp mill, which will almost
double the Company’s production capacity. Pulp
production began in March, in full compliance with
the project's schedule and budget, with production
levels indicating a promising learning curve. Even
during the execution of this highly complex project
and the ongoing worsening of the Brazilian economic
indicators in early 2016, Klabin has once again proven
its ability to execute and the consistency of its results.
Through the versatility of its product line and
operations in resilient markets, adjusted EBITDA for
the quarter was R$512 million, up 11% over the same
period last year. In the last 12 months adjusted
EBITDA totaled R$2,026 million, marking the 19th
consecutive quarter of growth, even without the
benefit accruing from the pulp sales resulting from
the Puma Project.
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Exchange Rate
The real remained at a level close to R$4.00/US$ in the first two months of the year, still reflecting the country’s
economic and political crisis. However, after the strong appreciation of the real over the month of March, caused by
changes in the domestic political scenario and the maintenance of interest rates in the United States, the exchange
rate at the end of the quarter was R$3.56/US$ , 9% down from the close of 2015. In turn, the average exchange rate,
which reflects the impact of the high levels of the first two months of the year, was R$3.90, up 2% over 4Q15 and up
36% over 1Q15.
OPERATING AND FINANCIAL PERFORMANCE
Sales volume
Even with the extended retraction of activity in the packaging markets in Brazil throughout 2015, Klabin recorded an
increase in sales volume at the beginning of 2016. The total volume sold by the Company, excluding wood, was 455
thousand tonnes for the quarter, up 4% from the same period in 2015. It is worth noting that even with the start of
production at the Puma Unit in March, no pulp sales were incorporated into the 1Q16 results. Given the decline in
the domestic economy and the turmoil in international markets, this increase in sales once again reflected the
flexibility and global competitiveness of Klabin’s product line. This flexibility, combined with the capacity increases
implemented last year, especially new Recycled Paper Machine nº24 in Goiana (PE), enabled the Company to expand
its position in profitable markets.
92
2
93
9
1,0
27
1,0
89
1,1
80
1,2
86
1,3
51
1,4
24
1,4
52
1,5
04
1,5
62
1,6
02
1,6
27
1,6
52
1,7
18
1,7
55
1,8
12
1,8
81
1,9
76
2,0
26
400
900
1,400
1,900
2,400
EBITDA GROWTH
1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.9
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16
Sales Volume LTM(excluding wood – million tonnes)
Adjusted EBITDA LTM(R$ million)
∆ ∆1Q16/4Q15 1Q16/1Q15
Average Rate 3.90 3.84 2.87 2% 36% 3.9022 3 17%
End Rate 3.56 3.90 3.21 -9% 11% 3.558 4 -9%
Source: Bacen
1Q15R$ / US$ 1Q16 4Q15 ∆2016 2015
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Much like at the end of last year, for the first quarter of 2016 the higher average exchange rate over the same period
last year and the slowdown of the Brazilian economy have created a more favorable environment for exports and
Klabin again increased its sales to export markets. On the other hand, a strong presence in more resilient segments
of the domestic market has enabled the Company to maintain its stable sales in Brazil, even with significant signs of
worsening in various sectors of the economy.
In this context, the volume of exports in 1Q16 grew 13% over the same quarter last year to 164 thousand tonnes in
the period. The volume of domestic sales totaled 291 thousand tonnes in 1Q16, the same level as the volume sold in
1Q15. Thus, the share of exports in the overall sales volume was 36% in the quarter, versus 33% in the same period
last year, highlighting once again the Company's agility in positioning itself in different market settings.
Net Revenue
In the first quarter, net revenue, including wood, totaled R$1,463 million, up 12% over 1Q15. With the increasing
share of exports in the total volume, net revenue from sales to export markets totaled R$517 million in 1Q16, up
32% over 1Q15 and now accounting for 35% of total revenue, up from 30% in the same quarter last year.
Despite the impact of the economic weakness on the packaging paper markets in Brazil and the lower log sales in the
quarter with the start of supply to the new pulp plant, Klabin’s positioning in more resilient segments also increased
revenue in the domestic market, which was R$946 million for the quarter, up 3% over the same period last year.
Kraftliner24%
Coated Board37%
Conversion36%
Others3%
Sales volume by product 1Q16
67% 64%
33%36%
1Q15 1Q16
Sales volume(excluding wood – tsd tonnes)
Domestic Market Exports
455437
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Pro forma net revenue, including Klabin’s proportional revenue in Florestal Vale do Corisco S.A., totaled R$1,483
million for the quarter.
Operating Costs and Expenses
The unit cash cost, which includes fixed and variable costs and operating expenses, was R$2,120/t in 1Q16. Excluding
non-recurring items from other operating revenue and expenses, the unit cash cost for the quarter came to
R$2,108/t, up 8.5% over the same period last year, below the level of inflation recorded for period. Excluding the
additional costs related to technical stops of Turbo Generator 8 in Monte Alegre plant (PR) and maintenance at the
plant in Otacilio Costa (SC) occurred only in the first quarter of 2015, the change in unit cash cost between the two
periods was 11.6%, in line with Brazilian inflation.
70%65%
30%
35%
1Q15 1Q16
Net revenue(R$ milion)
Domestic Market Exports
1.463
1.308
Kraftliner17%
Coated Board38%
Conversion38%
Others2%
Wood5%
Net revenue by product
Labor / third parties
34%
Wood / Fibers15%
Chemicals14%
Freight11%
Fuel Oil2%
Maintenance materials / stoppage
9%
Electricity9%
Others6%
Cash Cost Breakdown1Q16
Labor / third parties
32%
Wood / Fibers13%Chemicals
15%
Freight11%
Fuel Oil3%
Maintenance materials / stoppage
10%
Electricity10%
Others6%
Cash Cost Breakdown1Q15
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The increase of the consumption of OCC (old corrugated containers) after the startup of the new Goiana recycling
machine, in addition to inflationary pressure on labor, exerted pressure on costs for the period. The higher export
sales volume, which increased the cost of freight, and the new hires to cope with the growth of the Company
operations also impacted the variation between the periods of comparison. On the other hand, lower costs of
energy, as well as the dilution of fixed costs through the increased sales volume, resulted in the increase in the per
ton cash cost in line with the government’s official price index for the comparison between the quarters.
Selling expenses totaled R$105 million in the quarter, up 11% over 1Q15, accompanying the increase in sales
revenue for the period. Thus, 1Q16 selling expenses represented 7% of net revenues, the same rate recorded in
1Q15, despite the increase in volume to the export market.
General and administrative expenses totaled R$100 million for the quarter, 33% over 1Q15 and 1% below the last
quarter of 2015. The new level of general and administrative expenses, already recorded in 4Q15, is mainly due to
extinction of payroll reduction programs by the government and the strengthening of corporate structures to cope
with the expansion of Klabin regarding its new pulp operations.
Other operating income/expenses resulted in a R$6 million expense in 1Q16.
Effect of the variation in the fair value of biological assets
The effect of changes in the fair value of biological assets was R$63 million positive in 1Q16, primarily due to the
growth of forests that have been recognized at their fair value. In turn, the effect of the depletion of the fair value
of biological assets in cost of goods sold was R$157 million in 1Q16. As a result, the non-cash impact of fair value of
the biological assets on operating income (EBIT) for the quarter was a negative R$101 million.
Operating Cash Flow (EBITDA)
The larger volume of papers available for sale after the increase in capacity introduced in 2015 enabled Klabin to
increase its share in export markets over the same quarter last year. Additionally, even with the sharp slowdown of
the domestic economy, Klabin was able to maintain the total volume of sales in Brazil steady with the rate seen in
1Q15, reinforcing the competitiveness of its products and the consistency of the markets in which it operates.
Coupled with the Company’s disciplined cost matrix, the increase in net revenue from the higher volume of sales and
the devaluation of the real was reflected in higher earnings compared to the same quarter last year, with operating
cash flow (adjusted EBITDA) at R$512 million and an EBITDA margin of 35%.
∆ ∆
1Q16/4Q15 1Q16/1Q15Net Income (loss) 1.074 521 (729) 106% n/a
(+) Income taxes and social contribution 259 264 (390) -2% n/a
(+) Net Financial Revenues (1.013) (232) 1.385 336% n/a
(+) Depreciation, amortization, depletion 251 268 250 -6% 0%
Adjustments according to IN CVM 527/12 art. 4º
(-) Biological assets adjustment (63) (227) (56) -72% 14%
(-) Equity Pickup (7) (7) (8) 0% -7%
(+) Vale do Corisco 12 15 8,17 -20% 47%
Ajusted EBITDA 512 603 461 -15% 11%
Adjusted EBITDA Margin 35% 37% 35% -2 p.p. 0 p.p.n/a - Not applicable
Note: Adjusted EBITDA margin is calculated considering the pro forma net revenue, which includes Vale do Corisco
4Q15 1Q15R$ million 1Q16
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This amount represents an 11% increase over the same quarter last year and includes Klabin’s R$12 million stake in
the company Florestal Vale do Corisco S.A.
Indebtedness and Financial Investments
Gross debt totaled R$17,889 million on March 31, 2016, down R$133 million from the end of 2015 mainly due to the
positive impact of the exchange rate on the portion of debt in foreign currency. Of the total debt, R$12,508 million,
or 70% (US$3,515 million) is denominated in US dollars, mainly export prepayments.
Even with the investments in the Puma Project, the Company’s cash and financial investments ended 1Q16 at
R$5,880 million, up R$269 million over 4Q15, a result of the Company's cash generation and capture of new
financing lines. This amount exceeds the financing amortizations due in the next 30 months.
Consolidated net debt totaled R$12,009 million on March 31, 2016, down R$402 million from the R$12,411 million
on December 31, 2015. This reduction is due to the effect of the lower exchange rate on foreign currency debt at the
end of the quarter and the Company’s cash flow generation, which more than offset the R$853 million in
investments and the R$ 120 million dividend payment made in the quarter. As a result, net debt/adjusted EBITDA,
which had been 6.3x at the end of 2015 fell to 5.9x at the end of 1Q16. It is worth noting that the launch of
operations at Klabin’s new pulp mill (Puma Project), which occurred in the last month of March, will tend to
accelerate the company's deleveraging process from the coming quarters.
The average maturity term remained stable at 48 months by the end of 1Q16, 40 months for financing in local
currency and 51 months for financing in foreign currency. Short-term debt at the end of the quarter amounted to
13% and the average cost of financing in local currency was 11.6% per annum and 4.6% per annum in foreign
currency.
3,1
36
3,4
37
3,5
95
3,9
85
2,7
11
2,8
24
4,0
28
5,2
42
7,4
40
8,1
44
11
,61
4
12
,41
1
12
,00
9
2.2 2.4 2.4 2.6
1.7 1.7
2.43.0
4.24.5
6.2 6.35.9
2.2 2.22.3 2.4
1.7 1.82.3
2.73.3
3.8
4.6
5.46.0
-4.0-3.5-3.0-2.5-2.0-1.5-1.0-0.50.00.51.01.52.02.53.03.54.04.55.05.56.06.57.0
(1,000)
1,000
3,000
5,000
7,000
9,000
11,000
13,000
15,000
17,000
Mar
-13
Jun
-13
Sep
-13
Dec
-13
Mar
-14
Jun
-14
Sep
-14
Dec
-14
Mar
-15
Jun
-15
Sep
-15
Dec
-15
Mar
-16
NET DEBT AND LEVERAGE
Net Debt (R$ million) Net Debt/EBITDA (R$) Net Debt / EBITDA (LTM)
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Financial Result
Even with the increase in the Company's gross debt in the last twelve months due to the contracting inflows of credit
lines linked to the Puma Project, financial expenses remained stable in the first quarter of 2016. The contracting of
credit lines at attractive costs kept financial expenses at R$224 million in 1Q16, compared to R$216 million in 1Q15
and R$234 million in 4Q15.
Financial revenue came to R$157 million for the quarter, stable compared to 4Q15, but 32% higher compared to the
R$119 million registered in 1Q15. This increase is explained by the increase in Brazilian interest rates, and the
increase in the Company's cash position.
As a result, the positive impact from higher financial revenue and the maintenance of financial expenses left the
financial result, excluding exchange rate variations, steady with a net loss of R$67 million in the first quarter of 2016,
a gain of R$30 million compared to net loss of R$97 million in 1Q15.
The exchange rate ended the quarter 9% below the level seen at the end of 2015. As a result, due to the impact on
the foreign currency debt, the net foreign exchange variation was positive by R$1,080 million in 1Q16. It is valid to
point out that the exchange variation has an exclusively accounting effect on the Company’s balance sheet, with no
significant cash impact in the short term.
Debt (R$ million)Short term
Local currency 984 5% 978 5%
Foreign currency 1,383 8% 1,068 6%
Total short term 2,367 13% 2,046 11%
Long term
Local currency 4,397 25% 4,701 26%
Foreign currency 11,126 62% 11,275 63%
Total long term 15,523 87% 15,976 89%
Total local currency 5,381 30% 5,679 32%
Total foreign currency 12,508 70% 12,343 68%
Gross debt 17,889 18,022
(-) Cash 5,880 5,611
Net debt 12,009 12,411
Net debt / EBITDA (LTM) 5.9x 6.3x
12/30/201503/31/2016
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BUSINESS PERFORMANCE
Consolidated information by business unit in 1Q16:
BUSINESS UNIT - FORESTRY
During the first quarter the log sales to third parties totaled 490 thousand tons, 35% below the 1Q15 volume. The
heavy rains that hit the forest regions of Paraná and Santa Catarina hampered the operation of timber harvesting,
impacting the log sales in the period. In addition to this factor, the beginning of the wood supply for new pulp
operation also contributed to lower sales to third parties.
With the difficulty in harvesting and timber transport over the period, selling prices to third parties were elevated
and revenue in log sales totaled R$80 million, down 11% compared to the 1Q15.
∆ ∆ ∆1Q16/4Q15 1Q16/1Q15 2016/2015
Wood 490 865 749 -43% -35% 490 3,204 -85%R$ millionWood 80 77 90 4% -11% 80 362 -78%
201520161Q15thousand tonnes 1Q16 4Q15
Domestic market 79 371 497 (1) 946
Exports - 452 65 - 517
Third part revenue 79 823 562 (1) 1,463
Segments revenue 222 286 3 (511) -
Total net revenue 301 1,109 565 (512) 1,463
Change in fair value - biological assets 63 - - - 63
Cost of goods sold (371) (666) (469) 502 (1,004)
Gross income (7) 443 96 (10) 522
Operating expenses (13) (105) (67) (17) (202)
Operating results before financial results (20) 338 29 (27) 320
Note: In this table, total net revenue includes sales of other products.
* Forestry COGS includes the exaustion of the fair value of biological assets in the period.
TotalConsolidationR$ million Forestry Papers Conversion
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BUSINESS UNIT – PAPER
Kraftliner
In the 1Q16, the sales volume of container boards totaled 110 thousand tons, an increase of 15% over the first
quarter of 2015. With the higher availability of recycled papers by recent increases in capacity for the production of
corrugated boxes, Klabin continued to target higher sales of virgin fiber papers to the foreign market.
Therefore, exports of kraftliner, driven by high average exchange rate during the period, grew 29% in volume and
48% in revenues compared to the 1Q15.
In the foreign market kraftliner prices in the 1Q16 released by FOEX remained stable over the same period of 2015 at
€ 571/t. In the domestic market, even with the economic downturn, the cost pressure in the production chain, such
as personnel and old corrugated container (OCC), has been supporting prices for packaging.
Coated Boards
In 1Q16, coated boards sales reached to 166 thousand tons, up 2% increase over the same period last year. The
domestic market registered growth of 4% in volume compared to 1Q15, especially in the food and beverage sectors,
proving the resilience of these markets even amidst the deterioration of the Brazilian economy. In the export market
volumes remained stable in the same comparison.
Net revenue for the period totaled R$555 million, up 17% over the revenue recorded in the first quarter of 2015, due
to the higher sales volume and the higher exchange rate, which benefited the portion of the coated boards destined
for the export market.
BUSINESS UNIT – CONVERSION
∆ ∆ ∆1Q16/4Q15 1Q16/1Q15 2016/2015
Total conversion 165 176 169 -6% -2% 165 690 -76%R$ millionTotal conversion 553 586 536 -6% 3% 553 2,251 -75%
201520161Q16 4Q15thousand tonnes 1Q15
∆ ∆ ∆Volume (1.000 tonnes) 1Q16/4Q15 1Q16/1Q15 2016/2015Kraftliner DM 29 23 33 26% -12% 29 116 -75%
Kraftliner EM 81 95 63 -15% 29% 81 303 -73%
Total Kraftliner 110 119 96 -7% 15% 110 418 -74%
Coated boards DM 93 109 89 -15% 4% 93 396 -77%
Coated boards EM 73 84 74 -13% -1% 73 289 -75%
Total Coated boards 166 194 163 -14% 2% 166 685 -76%
Total Paper 276 312 259 -12% 7% 276 1,103 -75%R$ millionKraftliner 244 261 182 -7% 35% 244 858 -72%
Coated boards 555 637 474 -13% 17% 555 2,096 -74%
Total Paper 799 898 655 -11% 22% 799 2,954 -73%
1Q16 4Q15 201520161Q15
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12
The year began with a greater decrease in the corrugated board box industry, which was down 5.3% compared to
1Q15, according to data released by the Brazilian Corrugated Board Association (ABPO). Despite the unfavorable
scenario, Klabin intensified its sales initiatives and improved existing contracts, resulting in a decline that was less
than the industry average in 1Q16.
With regard to industrial bags, the economic deterioration in Brazil also impacted the construction industry, and
data released by the National Cement Industry Union (SNIC) showed decrease of 15% in 1Q16 from the same period
last year. The impact of this decrease was mitigated by Klabin with higher sales to the export market, as well as the
Company's strong presence in the Northeast, where demand has been higher compared to other regions. Klabin is
increasing its presence in countries as Mexico and the USA and is obtaining success in the diversification of bag sales
not only to construction markets, but also for others uses as with fertilizers, animal feed, coffee and other goods.
In this context, Klabin’s conversion sales fell by only 2% in 1Q16 compared to 1Q15, again demonstrating its
resilience and flexibility of action in several markets. Quarterly revenue increased 3% in the same comparison due to
the transfer of increases for some raw materials and services that had been impacting Klabin’s production costs.
INVESTMENTS
Klabin invested R$853 million in 1Q16, including
investments in the new pulp mill in Ortigueira (PR). Of the
total invested in the quarter, R$80 million was allocated to
the operational continuity of the plants, R$25 million was
allocated to forestry operations, R$14 million was invested
in special projects and capacity expansions and R$734
million in the Project Puma.
The 1Q16 marked the startup of Klabin’s new pulp mill (“Puma Unit”) located in Ortigueira, Paraná. The first pulp
bale was produced on March 4, 2016, already with Chain of Custody certification from the Forest Stewardship
Council® - FSC® (FSC-C129105). The new unit’s construction was completed in 24 months and on budget. Total
investment in the project was R$8.5 billion, which included the infrastructure, taxes and contractual corrections.
The Puma Unit have the capacity to produce 1.5 million tonnes of pulp, with 1.1 million tonnes of bleached
hardwood pulp (eucalyptus) and 400 thousand tonnes of bleached softwood pulp (pine), a portion of which will be
converted into fluff pulp, making it the world’s only industrial unit designed to produce the three fibers. Klabin’s
production will help substitute imports of fluff pulp, which is an important input used to make diapers and sanitary
pads and will represent hard currency out flow savings form the country.
After the start up, the operations of the plant has taken place within the learning curve established by Klabin. During
the month of April the production of fibers has grown continuously and has already achieved daily production levels
equivalent to 80% of the nominal capacity. The first sales of pulp were also made in April.
CAPITAL MARKETS
Shares
In the first quarter of 2016, Klabin’s shares (KLBN11) depreciated 17%, against an increase of 15% for the Ibovespa.
The Company’s shares were traded during all of the BM&FBovespa trading sessions, registering 544 thousand
RELATÓRIO - 4T13 • 12 DE FEVEREIRO DE 2014 1Q16 EARNINGS RELEASE • APRIL 28, 2016
13
transactions involving 184 million shares and an average daily trading volume of R$63 million at the end of the
period. Over the last twelve months, Klabin’s shares appreciated by 6% against a decline of 2% for the Ibovespa.
Klabin’s capital stock is represented by 4,733 million shares, made up of 1,849 million common shares and 2,884
million preferred shares. Klabin’s shares are also traded on the US market, as Level I ADRs, listed on the “over-the-
counter” (OTC) market under the ticker KLBAY.
Klabin is a member of the BM&FBovespa’s Corporate Sustainability Index (ISE). The index is made up of the shares of
companies that stand out for their high degree of commitment to the sustainability of business and the country. The
participant companies are selected annually based on criteria established by the Getulio Vargas Foundation’s Center
for Sustainability (GVces). Klabin is part of the current portfolio until January 2017.
Dividends
The payment of dividends was approved by the board meeting of February 2nd
. The total amount paid on February,
22nd
was R$ 26,21 per 1000 stocks and R$ 131,07 per 1000 units totaling R$ 120 million disbursed.
Fixed Income
Klabin’s notes mature in July 2024, with an issue amount of US$500 million, and are being traded in the secondary
market of the Luxembourg Stock Exchange. The bonds were issued at a rate of 5.25% per year and interest payments
are made semi-annually, in January and July. Standard & Poor's and Fitch Ratings have maintained Klabin a BBB-
investment grade.
Mar-
15
Apr-
15
May-1
5
Jun-1
5
Jul-15
Aug-1
5
Sep-1
5
Oct
-15
Nov-1
5
Dec-
15
Jan-1
6
Feb-1
6
Mar-
16
Performance KLBN11 x Brazilian Index (Ibovespa)
KLBN11 Ibovespa Index
98
106
100
RELATÓRIO - 4T13 • 12 DE FEVEREIRO DE 2014 1Q16 EARNINGS RELEASE • APRIL 28, 2016
14
CONFERENCE CALL
Portuguese Friday, April 29, 2016 - 11:00 (Brasília).
Password: Klabin
Phone: (11) 3193-1133 or (11) 2820-4133
Replay: (11) 3193-1012 or (11) 2820-4012 – Password: 1821238#
The conference call will also be broadcast over the internet.
Access: http://cast.comunique-se.com.br/Klabin/1Q16
English (with simultaneous translation) Friday, April 29, 2016 – 10:00 a.m. (EDT).
Password: Klabin
Phone: U.S. participants: 1-888-700-0802
International participants: 1-786-924-6977
Brazilian participants: (55 11) 3193-1133 or (55 11) 2820-4133
Replay: (55 11) 3193-1012 or (55 11) 2820-4012 – Password: 3474917#
The conference call will also be broadcasted by internet.
Access: http://cast.comunique-se.com.br/Klabin/1Q16
With gross revenue of R$6.7 billion in 2015, Klabin is the largest integrated manufacturer, exporter and recycler of packaging paper in Brazil, with an annual production capacity of 2 million tons. Klabin has adopted a strategic focus on the following businesses: paper and coated boards for packaging, corrugated boxes, industrial sacks and wood logs. It is the leader in all of its market segments.
The statements in this earnings release concerning the Company's business prospects, projected operating and financial results and potential growth are merely projections and were based on Management's expectations regarding the Company's future. These expectations are highly susceptible to changes in the market, the general performance of the Brazilian economy, the industry and the international markets, and are therefore subject to change.
1Q16 EARNINGS RELEASE • APRIL 28, 2016
15
15
Appendix 1 Consolidated Income Statement (R$ thousand)
∆ ∆1Q16/4Q15 1Q16/1Q15
Gross Revenue 1,715,342 1,877,204 1,555,081 -9% 10%
Net Revenue 1,463,477 1,595,507 1,308,449 -8% 12%
Change in fair value - biological assets 63,447 226,614 55,538 -72% 14%
Cost of Products Sold (1,004,160) (1,063,709) (930,067) -6% 8%
Gross Profit 522,764 758,412 433,920 -31% 20%
Selling Expenses (105,264) (121,389) (94,461) -13% 11%
General & Administrative Expenses (100,037) (101,326) (74,964) -1% 33%
Other Revenues (Expenses) (5,049) 10,369 (6,033) N/A -16%
Total Operating Expenses (210,350) (212,346) (175,458) -1% 20%
Operating Income (before Fin. Results) 312,414 546,066 258,462 -43% 21%
Equity pickup 7,094 6,580 7,535 8% -6%
Financial Expenses (224,127) (233,853) (215,714) -4% 4%
Financial Revenues 157,222 159,906 118,846 -2% 32%
Net Foreign Exchange Losses 1,079,535 306,158 (1,287,743) 253% N/A
Net Financial Revenues 1,012,630 232,211 (1,384,611) 336% N/A
Net Income before Taxes 1,332,138 784,857 (1,118,614) 70% N/A
Income Tax and Soc. Contrib. (258,626) (264,251) 390,048 -2% N/A
Net income 1,073,512 520,606 (728,566) 106% N/A
- - - 0% 0%
Depreciation and amortization 250,779 268,446 250,316 -7% 0%
Change in fair value of biological assets (63,447) (226,614) (55,538) -72% 14%
Vale do Corisco 12,403 15,074 8,167 -18% 52%
Adjusted EBITDA 512,149 602,972 461,407 -15% 11%
(R$ thousands) 4Q15 1Q151Q16
1Q16 EARNINGS RELEASE • APRIL 28, 2016
16
16
Appendix 2 Consolidated Balance Sheet (R$ thousand)
Current Assets 8,616,633 8,675,744 Current Liabilities 3,382,676 3,162,295
Cash and banks 22,454 56,511 Loans and financing 1,870,514 1,716,306
Short-term investments 5,282,396 4,997,212 Debentures 490,522 329,810
Securities 575,070 557,143 Suppliers 653,497 703,199
Receivables 1,318,434 1,501,099 Taxes payable 42,514 45,400
Inventories 834,676 701,126 Salaries and payroll charges 151,146 195,349
Recoverble taxes and contributions 486,419 736,501 Dividends to pay 0 0
Other receivables 97,184 126,152 REFIS Adherence 63,015 61,772
Other accounts payable 111,468 111,459
Noncurrent Assets 18,317,442 17,592,436
Long term Noncurrent Liabilities 17,269,891 17,753,545
Taxes to compensate 1,297,729 1,159,638 Loans and financing 14,626,801 14,834,935
Judicial Deposits 79,411 77,391 Debentures 900,841 1,140,679
Other receivables 227,427 219,820 Deferred income tax and social contribution 927,575 954,269
Other investments 518,710 507,275 Other accounts payable - Investors SCPs 150,791 143,116
Property, plant & equipment, net 12,659,276 12,009,146 REFIS Adherence 356,552 361,240
Biological assets 3,522,068 3,606,389 Other accounts payable 307,331 319,306
Intangible assets 12,821 12,777
Stockholders Equity 6,281,508 5,352,340
Capital 2,384,474 2,383,104
Capital reserve 1,301,916 129,318,705
Revaluation reserve 48,706 48,705
Profit reserve 1,683,923 748,162
Valuation adjustments to shareholders'equity 1,044,309 1,064,181
Treasury stock (181,820) (185,774)
Total 26,934,075 26,268,180 Total 26,934,075 26,268,180
Assets Dec-15 Liabilities and Stockholders' Equity Dec-15Mar-16 Mar-16
1Q16 EARNINGS RELEASE • APRIL 28, 2016
17
17
Appendix 3 Loan Maturity Schedule - 12/31/2015
R$ million 2Q16 3Q16 4Q16 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025/26 TotalBNDES 104 74 90 268 476 476 415 301 250 245 234 188 1 2,855
Others 52 10 42 104 23 181 119 285 191 104 89 39 0 1,134
Debentures Interests 249 - 31 279 358 116 62 484 62 31 - - - 1,391
Local Currency 405 84 163 651 858 773 596 1,070 502 380 323 227 1 5,381
Trade Finance 514 57 106 677 1,241 1,267 1,225 1,232 872 678 59 - - 7,251
Fixed Assets 29 9 8 45 178 202 211 201 185 176 167 157 18 1,541
Bonds 18 - - 19 - - - - - - - 1,774 - 1,792
ECA's 12 62 2 76 126 252 252 246 244 204 164 164 198 1,924
Foreign Currency 573 129 115 816 1,545 1,722 1,687 1,678 1,300 1,059 390 2,094 216 12,508
Gross Debt 977 212 278 1,468 2,402 2,495 2,283 2,748 1,803 1,439 713 2,321 218 17,889
Local Currency 11.6% p.y. 40 months
Foreign Currency 4.6 % p.y. 51 months
Gross Debt 48 months
Average Cost Average Tenor
Local currency : R$ 5.4 billion
Average tenor: 40 monthsForeign currency: R$ 12.5 billion
Average tenor : 51 months
Foreign Currency12,508
LocalCurrency 5,381
Gross Debt17,889
R$ million
405
84 163
651
858 773
596
1.070
502 380
323 227
1
573
129 115
816
1.545 1.722
1.687
1.678
1.300
1.059
390
2.094
216
977
212 278
1.468
2.402 2.495
2.283
2.748
1.803
1.439
713
2.321
218
2Q16 3Q16 4Q16 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025/26
1Q16 EARNINGS RELEASE • APRIL 28, 2016
18
18
Appendix 4 Consolidated Cash Flow Statement (R$ thousand) Cash flow from operating activities 960,592 430,622
Operating activities 694,097 637,907
. Net income 1,073,512 (728,566)
. Depreciation and amortization 77,405 75,166
. Change in fair value - biolgical assets (63,447) (55,538)
. Depletion in biological assets 173,374 175,150
. Deferred income taxes and social contribution (9,503) (393,011)
. Interest and exchange variation on loans and financing (266,389) 1,563,114
. Payment of interest on loans (302,779) (180,384)
. Interest, exchange variation and profit sharing of debentures 26,600 188,783
. Variation of the present value of debentures 7,254 10,223
. REFIS Reserve 12,210 14,997
. Equity results 444 505
. Results on Equity Pickup (7,094) (7,535)
.Income taxes and social contribution (11,730) (14,815)
. Others (15,760) (10,182)
Variations in Assets and Liabilities 266,495 (207,285)
. Receivables 182,665 (125,007)
. Inventories (133,550) (36,085)
. Recoverable taxes 123,721 (332,270)
. Marketable Securities (17,927) (8,330)
. Prepaid expenses (3,011) 516
. Other receivables 15,640 (9,876)
. Suppliers 165,294 295,485
. Taxes and payable (2,886) (16,807)
. Salaries, vacation and payroll charges (44,203) (28,209)
. Other payables (19,248) 53,298
Net Cash Investing Activities (849,549) (997,850)
. Purchase of property, plant and equipment (827,775) (978,189)
. Cust biological assets planting (ex taxes) (25,606) (21,461)
. Income of assets sale 3,832 1,800
. Sale of property, plant and equipment - -
Net Cash Financing Activities 140,084 390,545
. New loans and financing 792,114 755,744
. Debentures interest payment (130,718) -
. Loan amortization (407,512) (359,097)
. Dividends payed (120,015) -
. Stocks repurchase - (11,151)
. Stocks disposal 6,215 5,262
. Minority shareholders entry - -
. Minority shareholders exit - (213)
Increase (Decrease) in cash and cash equivalents 251,127 (176,683)
Cash and cash equivalents at beginning of period 5,053,723 5,245,833
Cash and cash equivalents at end of period 5,304,850 5,069,150
1Q16 1Q15