bradesco's 7th london conference
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Bradesco’s 7th
London ConferenceJune, 2015
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2
The information contained in this presentation may include statements whichconstitute forward-looking statements, within the meaning of Section 27A of the U.S.
Securities Act of 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 and uncertainty with respect to business, financial, trend, strategy and other
forecasts, and are based on assumptions, data or methods that, although considered
reasonable by the company at the time, may turn out to be incorrect or imprecise, or
may not be possible to realize. The company gives no assurance that expectations
disclosed in this presentation will be confirmed. Prospective investors are cautioned
that any such forward-looking statements 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 business and other risks referred to in the
company’s filings with the CVM and SEC. The company does not undertake, and
specifically disclaims any obligation to update any forward-looking statements, which
speak only for the date on which they are made.
Disclaimer
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Company Overview1Pulp and Paper Market2
Financial and Operational Highlights3
Agenda
Final Remarks
4
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Company Overview
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A Winning Player
Port Terminal Pulp Unit
Três Lagoas
Santos
AracruzPortocel
Caravelas
BelmonteVeracel
Jacareí
Superior Asset Combination Main Figures – 1Q15 LTM
Pulp capacity million tons 5,300
Net revenues R$ billion 7.4
Total Forest Base(1) thousand hectares 968
Planted area(1) thousand hectares 561
Net Debt R$ billion 9.0
Net Debt/EBITDA (in Dollars)(2) X 2.3
Source: Fibria
(1) Including 50% of Veracel, excluding forest partnership areas and forest bases linked to the sales of Losango and forest assets in Southern Bahia State.(2) For covenants purposes, the Net Debt/EBITDA ratio is calculated in Dollars.
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Worldwide presence
Strong global customer base
Long-term relationships
Focus on customers with stable business
Customized pulp products and services
Sound forestry and industrial R&D
Focus on less volatile end-use markets such as tissue
Efficient logistics set up
Low dependence on volatile markets such as China
Low credit risk
100% certified pulp (FSC and PEFC/Cerflor)
Sales Mix by End Use - Fibria Highlights
Fibria’s Commercial Strategy
Sales Mix by Region - Fibria
Region - 1Q15 End Use - 1Q15
Europe
46%
N.
America
17%
Asia
26%
Other
11%
30%20%
29% 29% 24%18%
26% 26% 30%22%
28% 31% 30%19% 22% 26% 27%
17%
37%46%
46% 41%
35% 44%
43% 41% 36%42%
43% 35% 36%46% 42% 39% 40%
46%
22% 25%14% 20%
31% 28%20% 23% 25% 26%
21% 26% 26% 26% 27% 25% 23% 26%
11% 9% 11% 10% 10% 10% 11% 10% 9% 10% 8% 8% 8% 9% 9% 10% 10% 11%
4Q101Q112Q113Q114Q111Q122Q123Q124Q121Q132Q133Q134Q131Q142Q143Q144Q141Q15
North America Europe Asia Other
Tissue
48%
Printing &
Writing
35%
Specialties
17%
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Pulp Supply Agreement: Puma Project
Logistics and commercial
structure synergies;
Ensure sales volumes;
Ensure pulp market access with
Klabin brand.
Logistics and commercial
optimization and synergies;
Support customers’ growth and
enhance customers’ needs;
Potential development of new
customers.
▶ Agreement benefits:
Mutual value creation, with better servicing for both Companies customer’s base
▶ Pulp volumes:
• Minimum of 900 kt of hardwood for the first 4 years
• 75% of 900 kt for the fifth year (phase out 1)
• 50% of 900 kt for the sixth year (phase out 2)
▶ Selling price based on the average net price charged by Fibria at the Port of Paranaguá (FOB Paranaguá)
▶ Operational startup: Mar/2016
▶ Sales destination: Globally, except for South America
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(1) Controlling group(2) Free Float 40.14% + Treasury 0.06%
VotorantimIndustrial S.A. (1)
29.42%
BNDESParticipações (1)
30.38%
FreeFloat (2)
40.20%
• Only 1 class of shares →100% voting rights
•
100% tag along rights (Brazilian corporate law establishes 80%)• Board of Directors with minimum 20% independent members
• Financial Statements in International Standards – IFRS
• Adoption of Arbitration Chamber
• SEC Registered ADR Level III program
• Indebtedness and Liquidity
• Market Risk Management
• Risk Management
• Corporate Governance
• Related Parties Transactions
• Anti-Corruption
• Information Disclosure
• Securities Trading
• Antitrust
• Genetically Modified Eucalyptus
Fiscal
Council
Board of
Directors
20% independentmembers
Role of CEO andchairman is split
Personnel andRemuneration
Committee
StatutoryAudit
Committee
Finance
Committee
Sustainability
Committee
Innovation
Committee
General
Meeting
Listed on Novo Mercado, highest level at BM&FBovespa: Policies approved by the Board of Directors:
Shareholder Structure and Corporate Governance
30%independent
members
100%independent
members
50% independent
members
45% independent
members-
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Expected scenario for 2013 in Nov’2012
BHKP CAPACITY CHANGES
Realized scenario in 2013
1,270
100
-155
-410
-140
-60
605
1,310
Eldorado
UPM Fray Bentos
Sappi Cloquet
Jari
Cellulose du Maroc
Sodra Tofte
Net
BEKP demand growth*
1,275
320
555
-155
-410
1,585
1,080
Eldorado
Suzano Maranhão
Montes del Plata
Sappi Cloquet
Jari
Net
BEKP demand growth*
DELAYED
Unexpected
Closures
In 2013, we stressed the difference between the expected scenario
and the realized one...
*Source: PPPC Outlook for Eucalyptus Market Pulp November 2012 *Source: PPPC Outlook for Eucalyptus Market Pulp September 2014
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As a result we had better prices than expected
Consultants: Hawkins Wright, RISI and Brian McClay (published in the end 2012 for 2013 prices)
BHKP Delivered to Europe (USD/t)
765
772
767
784
772
788
814
795
770
791
740
750
760
770
780
790
800
810
820
1Q13 2Q13 3Q13 4Q13 Annual 2013
Consultants average for 2013 Realized PIX/FOEX price
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BHKP CAPACITY CHANGES
The “better than expected scenario” happened again last year...
Realized scenario in 2014
1,770
-105
-85
-65
-120
-70
100
235
550
1,100
230
BEKP demand growth
Net
Ence Huelva
Old Town
APRIL Rizhao
Sodra Tofte
Sappi Cloquet
UPM
Oji Nantong*
Montes del Plata
Suzano Maranhão
Eldorado
1,7341,380
2,660
-120
-115
560
830
1,275
230
BEKP demand growth**
Net
Sodra Tofte
Sappi Cloquet
Oji Nantong*
Montes del Plata
Suzano Maranhão
Eldorado
Expected scenario for 2014 in Dec’13
More unexpectedmill closures
*Partly integrated to existing PM**Source: PPPC Outlook for Eucalyptus Market Pulp November 2013
*Approved license only for 500,000 t/y
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Then, what about 2015?
1005
-315
-65
115
85
30
200
750
265
750
400
BEKP demand growth**
Net
Possible closures*
Ence Huelva
April Rizhao
Sappi Cloquet
Old Town (Expera)
Portucel Cacia
Eldorado
CMPC Guaiba II
Oji Nantong
Montes del Plata
Suzano Maranhão
-400 to -800
1,415 to 1,815
Expected scenario for 2015 in Dec’14 Realized scenario in 2015
?
BHKP CAPACITY CHANGES
*Based on annual closures average (400,000 to 800,000 t/yr)**Source: PPPC Outlook for Eucalyptus Market Pulp September 2014
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Shipments of Eucalyptus Pulp
(1) Source: PPPC World 20 – January/2015
Global Market BEKP Demand
Paper Capacity increase in China
2014 2015 Total
FORECAST REALIZEDPREVIOUS
FORECAST
LATEST
FORECASTPREVIOUS LATEST
Woodfree 256 256 760 760 1,016 1,016
Tissue 1,390 1,278 727 1,365 2,117 2,643
Cartonboard 2,100 1,326 380 730 2,480 2,056
Total 3,746 2,860 1,867 2,855 5,613 5,715
Source: Fibria and Independent Consultants
675 kt
86 kt 106 kt291 kt
192 kt
13%
17% 5%
27%14%
Total North
America
Western
Europe
China Others
4M2015 vs. 4M2014(2)
(1) Source: PPPC World 20 – December/2014
2014 vs. 2013(1)
1,734 kt
92 kt
386 kt717 kt
537 kt
11%
5%
6%
20%13%
Total North
America
Western
Europe
China Others
(2) Source: PPPC World 20 – April/2015
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Commodities Differentiation
China GDP breakdown
China commodity demand - basis 100
49% 49% 48% 49% 49% 50% 50% 50% 51% 51% 52%
44% 47% 48% 48% 48% 48% 48% 48% 47% 47% 46%
8% 4% 4% 3% 3% 2% 2% 2% 2% 2% 2%
2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015E 2016E 2017E 2018E
Consumption Investment Net Exports
2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015E 2016E 2017E 2018E
Corn Soybeans Wheat Crude oil Iron ore Sugar BHKP
100
248
204190
166153
124120
Source: Itaú Macroeconomic Department and PPPC – May/15
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Technical Age and Scale in the Market Pulp IndustryFurther closures are expected due to lack of adequate investments in the industry…
Hardwood (BHKP) Market Pulp Softwood (BSKP) Market Pulp
STRONGWeighted average
technical age 12.3 years
Weighted average
capacity 1,277,000 t/a
Aracruz
Três Lago as
Veracel
Jacareí
0
500
1.000
1.500
2.000
2.500
3.000
051015202530
PM Capacity, 1000 t/a
Technical Age, years
WEAK
STRONGWeighted average
technical age 21 years
Weighted average
capacity 527,000 t/a
North American Pulp Mills Other Pulp Mills Closures Grade Switch On & Off
WEAK0
500
1.000
1.500
2.000
2.500
3.000
0102030
PM Capacity, 1000 t/a
Technical Age, years
More than 7.7 million tons of capacity above 25 years and with annual capacity below 500,000 t/y.
Old
Town
Ence
Huelva
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Source: PPPC and Fibria
Closures of Hardwood Capacity Worldwide
(000 ton)
Capacity closures DO happen
-910
-85
-1,260
-1,180
-540-500
-105
-1,085
-445
-750
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015-2017 E (1)
(1) As of April 2015
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Total Cash Cost of BHKP delivered to Europe (US$/t)
Source: Hawkins Wright (Outlook for Market Pulp, April 2015) | Fibria’s 1Q15 considering a FX of R$/US$2.8737. | “Brazil” 2014 considering FX of R$/US$3.05.
Gray bar includes cash expenses as Interest, CAPEX, SG&A and Taxes (Source: RISI and Fibria).
1Q15 net price:
US$ 560/t
W/K
Among the industry’s lowest cash cost producers
453419
351312
286329
207 199
70
87
105
4464
27
7255
China USA Canada Indonesia Chile/Uruguay Iberia Brazil Fibria
Cash Cost (US$/t) Delivery (US$/t)
SG&A
Capex
Interest
Income Tax
Capacity
(k tons):1,925 1,610 1,030 3,785 4,695 2,015 = 28,99013,930 5,300
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Lowest volatility among commodities
Commodities Historical Volatility (US$)(1)
Low volatility of hardwood pulp price, even though new capacities have
come on stream in the period
Source: Bloomberg - May, 25th 2015
100 = January 1st, 2012
30
40
50
60
70
80
90
100
110
120
130
140
150
160
170
180
J a n - 1 2
F e b - 1 2
M a r - 1 2
A p r - 1 2
M a y - 1 2
J u n - 1 2
J u l - 1 2
A u g - 1 2
S e p - 1 2
O c t - 1 2
N o v - 1 2
D e c - 1 2
J a n - 1 3
F e b - 1 3
M a r - 1 3
A p r - 1 3
M a y - 1 3
J u n - 1 3
J u l - 1 3
A u g - 1 3
S e p - 1 3
O c t - 1 3
N o v - 1 3
D e c - 1 3
J a n - 1 4
F e b - 1 4
M a r - 1 4
A p r - 1 4
M a y - 1 4
J u n - 1 4
J u l - 1 4
A u g - 1 4
S e p - 1 4
O c t - 1 4
N o v - 1 4
D e c - 1 4
J a n - 1 5
F e b - 1 5
M a r - 1 5
A p r - 1 5
M a y - 1 5
Iron Ore Soy Bean Crude Oil Sugar BHKP Price (FOEX Europe) Exchange Rate (USD - BRL)
120
164
77
53
60
44
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Brazilian macroeconomic data evolution
11 11 15 13 10
-3 -6 -7 -7 -1 -1 3
13
25
34
45 4640
25 2520
30
19
2 -4 -5
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Trade Balance - R$ billion
(1) From Jan/15 to Apr/15.
-8 -8 -8 -2
3 08
2 4
31
87
3
47 49
59
19
-6
11
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Balance of Payments - R$ billion
(1)
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Financial and Operational Highlights
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FX and Pulp Price explain 80% of Fibria’s EBITDA Margin
(1) Excludes Conpacel | (2) 2014 year end market consensus | (3) According to Focus Report (Brazilian Central Bank – May. 25th, 2015) | (4) According to Poyry – full cost estimate - includesManufacturing + Delivered costs to Rotterdam + Depreciation + ROCE of 9%
Each 10% depreciation of the Real increases EBITDA by approx. R$770 million
1,522
2,526
1,964 2,253
2,796 2,791
2009 (1) 2010 (1) 2011 2012 2013 2014 2015
Exchange Rate
Average (R$/US$)
EBITDA Margin
EBITDA (R$ million)
29%40%
34% 36% 40% 39%
Marginal producer cost
(US$/t)(4)
Fibria net pulp price
(US$/t)
Market
Consensus
456
670639
581610 572 564
660627
676657
680 676
912
1,1791,067 1,133
1,281 1,310
1,731
Fibria net pulp price
(R$/t)
2.00 1.76 1.67 1.952.10 2.29
3.07(3)
No exposure to eletricity shortage risks in spite of which the
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No exposure to eletricity shortage risks, in spite of which the
company has benefited from the sale of its surplus energy
Management initiatives seeking to maintain the cash cost below inflation.
(Utilities: 1Q15: R$25/t I 4Q14: R$37/t I 1Q14: R$18/t)
549572
1915
10 ( 11 ) ( 7 ) ( 3 )
1Q14 Wood FX Materials and
Services
Energy
Consumption
Utilities Others 1Q15
+ 4.2%
Cash Production Cost – Total and Ex-Downtime (R$/t)
524 472 548549 472
572
1Q14 4Q14 1Q15
Cash Cost ex-Downtime Cash Cost
Cash Production Cost (R$/t)
Cash Production Cost saw a annual increase of 3 7% over the past
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Fibria Cash Production Cost (1) (R$/ton)
Consistently
controlling the
production
cash cost at alevel below
the inflation
pace.
27
Cash Production Cost saw a annual increase of 3.7% over the past
6 years
432 448
471 473
505 519
2009 (2) 2010 (2) 2011 2012 2013 2014
CAGR: + 3.7%
(1) Constant Currency (2) Excludes Conpacel
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Net Results (R$ million) – 1Q15
1,007
(1,685)(566)
(123) (44)(85)
(448)643
179(22)
Adjusted
EBITDA
FX Debt /
MtM Debt
Hedge
MtM
Operational
Hedge
Swap/ZCC
settlements
Net
Interest
Deprec.,
amortiz. and
depletion
Income
Taxes
Other FX and
monetary
variations
Others Net Income
(Loss)
FX Debt∆
deffered
∆ ∆
MtM
hedge∆
swapZCC
(1)
current
(1)
Includes non-recurring expenses/non-cash and other financial income/expenses.
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Free Cash Flow (1) – 1Q15 LTM (R$ million)
3,119
1,001(1,645)
(322) ( 149 ) (34) 32
Adjusted EBITDA Capex Interest
(paid/received)
Working Capital Taxes Others Free Cash Flow
(1) Does not include non-recurring items.
FCF/ton: US$76
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Indebtdeness
Net Debt (Million)
2.42.7 2.9
2.4 2.4 2.3
8,445 8,3279,352
3,732 3,135 2,915
Mar/14 Dec/14 Mar/15R$ US$
Gross Debt and Interest Expenses (Million)
6,970 7,5498,991
3,080 2,842 2,803
Mar/14 Dec/14 Mar/15R$ US$
Net Debt/EBITDA (US$)
Debt Amortization Schedule (US$ Million) Average Tenor (months) and Cost of Debt* in US$ (% p.a.)
113
545
657
241205
339
438
623
363
8419 3
600
Liquidity 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Pre-payment BNDES ECN ACC/ACE Voto IV Bond
(cash)
(revolver)
58 4435
Interest (US$)
- 22%
Net Debt/EBITDA (R$)
47
55 54
Mar/14 Dec/14 Mar/15
3.7
3.4
3.5
- 40%
(*) Considering the portion of debt in reais fully adjusted by the market swap curves at the end
of each period.
Capital Structure: Fibria has achieved the lowest leverage ratio among
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Net Debt/EBITDA (x)(1)
Fibria Arauco CMPC Klabin Suzano
S&P BBB-/Stable BBB-/Stable BBB-/Negative BBB-/Negative BB/Stable
Moody’s Ba1/Positive Baa3/Stable Baa3/Negative - Ba2/Stable
Fitch BBB-/Stable BBB/Stable BBB+/Stable BBB-/Stable BB/Stable
(1) Fibria’s historical data in BRL.
Capital Structure: Fibria has achieved the lowest leverage ratio among
its Latin American peers
2.4 2.3
2.72.7 2.9
4.84.5 4.5
4.13.9
1.7 1.72.4
3.0
4.2
2.93.1
3.1 3.43.6
3.6 3.7 3.6 3.2
14.8
13.2
11.7 11.18.9 7.7
4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1T15
Fibria Suzano Klabin CMPC Arauco Eldorado
A consistent and disciplined approach focused on reducing debt
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A consistent and disciplined approach focused on reducing debt
and its cost
Debt (US$ million) x Leverage (US$) Interest (US$ million) x Cost of Debt (US$)
Free Cash FlowIncrease
InterestReduction
Cost of DebtReduction
This dynamics
creates a virtuouscycle
8.6
2.9
6.3
2.8
2009 2010 2011 2012 2013 2014 Mar/15
Gross Debt Net Debt
7.5
4.1 4.23.3
2.6 2.4 2.3 473414 408
350
268200 178
2009 2010 2011 2012 2013 2014 LTM
6.3 5.95.5
5.2 4.63.4 3.5*
(*) Considering the portion of debtin reais fully adjusted by the market swap curves ofMar. 31, 2015.
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113 140 140143 150
160175
225
COPEC Ecopetrol Raizen Fibria Colbun Braskem Molymet TGI (O&G)
LatAm Investment Grade Loans Spread over Libor (bps) (1)
Avg. Term 4 years 5 years 4 years 5 years 6 years 5 years 5 years 5 years
(1) As of April 2015
…and performing better than Investment Grade issuers
Secondary G-Spread to Maturity (bps) (1)
228 237 246 265 279 288314
360381
404 410 419463
Globopar 22 Brasil Foods 24 Embraer 23 Fibria 24 Votorantim 24 Vale 22 Klabin 24 Samarco 24 Gerdau 24 Bras kem 24 Petrobras 24 Odebrecht 25 Eletrobras 21
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Fibria has a low correlation with Brazil…
(1) Source: Bloomberg as of May, 2015
Bonds Correlation (1)G-Spread (bps) (1)
0.90.8
0.7
0.6
0.3
0.0
FIBRBZ '24 vs.
PETBRA '24
FIBRBZ '24 vs.
BRAZIL '25
FIBRBZ '24 vs. CDS
Brazil
Correlation Since May 2014 Correlation Since January 2015
100
150
200
250
300
350
Brazil 2025 CDS Brazil 10y Fibria 2024
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36
Fibria has the simplest and most transparent call in the industry
Negative Neutral Positive
Pulp supply ✔
Closures/conversions ✔
Inefficient capacities in China ✔
Demand ✔
‣ Fiber and grade substitution ✔
‣
Tissue ✔
‣China ✔
Pulp price ✔
Brazil GDP ✔
Energy crisis ✔
FX ✔
Capex inflation ✔
Cost inflation ✔
Rating ✔
Tax ✔
Corporate Governance ✔
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37Final Remarks
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38
PULP
- Growth with discipline
- Best portfolio of projects
BIO-ENERGY
- Complementary to pulp
- Ensyn
INDUSTRY
CONSOLIDATION ?
OTHER OPPORTUNITIES
- Portocel
- Land and forest
PotentialGrowth
Prospects
Fibria is seeking value creation for its shareholders with capital discipline
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39Horizonte 2 Project
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40
• Follow the growth of strategic customers
• Developing new customers
• Distribution to new geographic markets
• Efficiency and competitiveness gains in logistics
• Higher quality in customer service
• Greater ability to capture new expansion market windows
• Strong M&A position
Competitiveness
Commercialpositioning
Long-term growthpotential
What is the importance of growth for Fibria?
• Wider fixed costs dilution
• Cost curve position improvement
• Greater bargaining power with suppliers
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41
Why expand Três Lagoas?
• Brownfield Project, synergies with currentoperations
• Modern plant, prepared for potentialexpansion
• Availability of wood and low average
distance from forest to mill
• Forest based on the optionality concept andprioritizing lease and partnership models
• Additional energy surplus of 120 MWh
Start-up: 4Q2017
Capacity: 1.75 million tons
ESTIMATED BHKP CAPACITY RANKING 2017 (000T)
Source: Poyry and Fibria Analysis (as of May 2015)
0 2000 4000 6000 8000
OthersKlabin
Domtar Pulp Mill Holding
LwartPortucel Soporcel
Georgia-PacificResolute
VersoNippon Paper
MondiOji
MitsubishiMarubeni
IPAltri
ENCECenibraArauco
Stora EnsoUPM
EldoradoAPP
SuzanoRGE/APRILCMPC
Fibria 7,950
Current Capacity
New Capacity
New Capacity – Klabin Agreement
New Capacity – Horizonte II Project
l l d i i ib i i h h k
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42
Pulp sales destination: Fibria growing where the market grows
(1) Considers 1Q15 last twelve months.
32%
45%
42%
25%
19%23%
4%10%
H2 sales volume distribution
Current sales volume distribution(1)
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44
Equipmentpurchase
Investmentapproval
Beginning of civilwork
Start-up
Schedule
May/15 Jun/15 4Q15 4Q17
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45Forestry base
H2 Project will have the forest base ready for the start-up
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46
H2 Project will have the forest base ready for the start-up
Forestry base required:
H1: 120,000 ha
H2: 174,000 ha
Total: 294,000 ha
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47Logistics
Forestry Logistics
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48
Low average distance from forest to mill
FOREST MILL
95 km
H1 + H2 consolidated
Outbound logistics
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49
Fibria has logistical alternatives on a competitive basis
SantosPort
Mill
Pulp flow: From Mill to the Port
International Logistics
•
Logistics andcommercial optimization
• Greater bargainingpower with suppliers
ALL railroad - meter gauge
ALL railroad - broadgauge
MRS railroad - broadgauge
North-South railroad
Waterway
Highway
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50Financials
Even more competitive cash production cost
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51
Source: Hawkins Wright (Outlook for Market Pulp, April 2015) - FX considered by the consultant of R$/US$3.05.
H2 cash cost was estimated according to weighted average cost, after mill balance, converted by R$3.05. Includes energy sales.
BHKP (US$/t)
453419
351329
312 286
207173 158
China USA Canada Iberia Indonesia Chile/Uruguay Brazil Fibria 1Q15 LTM Fibria w/ H2
I d i l f i
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52
Industrial + forestry expansion capex
Expansion Breakdown Expansion capex expected curve
R$ MILLION R$/T(2)
Industrial andlogistics
6,695 3,826
Forestry (includesforestry equipment)
632 361
Other(1) 379 217
Total 7,706 4,4047%
45%
37%
7%4%
2015 2016 2017 2018 2019onwardsIndustrial capex breakdown by currency:
BRL - 72%EUR – 26%USD and Swedish Krona – 2%
(1) Includes chemical plant leasing and investments to increase capacity to 1,850 kt/year.(2) The calculation considers 1,750 kt/year of capacity.
Funding sources: Company’s cash generation and financing
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53
instruments
Risk mitigation strategies in case ofBRL appreciation:
- Pre-funding on favorable FXscenarios
- Cash flow hedging strategy mainlywith Zero Cost Collar
INSTRUMENTESTIMATED AVERAGE
MATURITY
BNDES(2) 6.1 years
FDCO 8.5 years
ECAs 6.5 years
Banks 5 years
Bond Market 10 years
Estimated average cost in US$ of3.0% p.a.(1) and average term of
the new debt of 7.3 years
Total amount of debt financingand the proportion of each
instrument will depend on theCompany’s cash generation
during the construction period
(1) Adjusted by the Market swap curves as of May 14th, 2015. Source: Bloomberg
(2) Considering 50% of TJLP, 25% of SELIC + spread and 25% CRA.
Rating agencies understand that the Project will not jeopardize
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Fibria’s credit metrics
“We expect Fibria to continue benefiting from higher operating cash flows whichwould allow it to enlarge its Três Lagoas industrial complex while keeping its debt at
reasonable levels for a low investment-grade rating”
“Fitch’s base case, which assumes that the company builds a new pulp mill (TrêsLagoas II) starting in 2015 and uses net pulp prices of between USD575 and USD675
per ton during the construction period, results in net leverage reaching 3.5x
(1)
. Netleverage would quickly decline to around 2.5x(1) once the mill becomes operationalin the second half of 2017”
(1) According to rating agency methodology
Project financials at a glance
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Project financials at a glance
UNIT
Pulp production/year(1) k tons 1,750
Expansion capex(2) R$ billion 7.7
Sustaining capex(3) R$/t 193
Cash cost(4) R$/t 341
Energy surplus MWh 120
(2) Includes chemical leasing and investments in order to increase capacity to 1,850 kt/year.
(3) Estimated sustaining capex in perpetuity considering capacity of 1,850 kt/year.
(4) Estimated weighted average cost, after mil l balance. Includes energy sales.
(1) Creep capacity will increase production to 1,850 kt/year
Final Remarks
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Final Remarks
• Economies of scale
• Synergies with current operations
• Wood availability and low distance from forest to mill
• Fibria’s total energy surplus to be increased by 120 MWh
• Cash cost competitiveness
• Meet customers’ demand growth
• Attractive returns even in scenarios with appreciated BRL
• Solid financial profile