ubs 14th global emerging markets one-on-one … presentation... · ubs 14th global emerging markets...
TRANSCRIPT
UBS 14th Global Emerging Markets One-on-One Conference December, 2016
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 ExchangeAct of 1934, as amended. Such forward-looking statements involve a certain degree ofrisk and uncertainty with respect to business, financial, trend, strategy and otherforecasts, and are based on assumptions, data or methods that, although consideredreasonable by the company at the time, may turn out to be incorrect or imprecise, ormay not be possible to realize. The company gives no assurance that expectationsdisclosed in this presentation will be confirmed. Prospective investors are cautionedthat any such forward-looking statements are not guarantees of future performanceand involve risks and uncertainties, and that actual results may differ materially fromthose in the forward-looking statements, due to a variety of factors, including, but notlimited to, the risks of international business and other risks referred to in thecompany’s filings with the CVM and SEC. The company does not undertake, andspecifically disclaims any obligation to update any forward-looking statements, whichspeak only for the date on which they are made.
Disclaimer
3
Pulp and Paper Market2Financial and Operational Highlights3
Agenda
Company Overview1
2017 Outlook – CAPEX and Cash Cost4Expansion Project – Horizonte 2
Back up65
4
Company Overview
5
Shareholder Structure and Corporate Governance
(1) Controlling group (2) Free Float 41.44% + Treasury 0.06%
Votorantim S.A. (1)
29.42%
BNDESParticipações (1)
29.08%
FreeFloat (2)
41.50%
► 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
Listed on Novo Mercado, highest level at BM&FBovespa:
Policies approved by the Board of Directors:
Fiscal
Council
Board of
Directors
20% independent members
Role of CEO andchairman is split
Personnel
and
Remuneratio
n Committee
Statutory
Audit
Committee
Finance
Committee
Sustainability
Committee
Innovation
Committee
30%
independent
members
100%
independent
members
50%
independent
members
45%
independent
members-
General
Meeting
► Indebtedness and Liquidity
► Market Risk Management
► Risk Management
► Corporate Governance
► Related Parties Transactions
► Anti-Corruption
► Information Disclosure
► Securities Trading
► Antitrust
► Genetically Modified Eucalyptus
► Dividend Policy
► Sustainability NEW
6
A Winning Player
Port Terminal Pulp Unit
Três Lagoas Unit and Horizonte 2 Project
Santos
AracruzPortocel
Caravelas
BelmonteVeracel
Jacareí
Superior Asset Combination Main Figures – 3Q16 LTM
Pulp capacity(1) million tons 5.300
Net revenues US$ billion 2.777
Total Forest Base(2) thousand hectares 969
Planted area(2) thousand hectares 568
Net Debt US$ billion 3.272
Net Debt/EBITDA (in Dollars)(3) X 2.64
Source: Fibria(1) Volume does not include Horizonte 2 project pulp capacity(2) Including 50% of Veracel, excluding forest partnership areas and forest bases linked to the sales of Losango and forest assets in Southern Bahia State; As of December 31, 2015. (3) For covenants purposes, the Net Debt/EBITDA ratio is calculated in Dollars.
7
Fibria’s Units Industrial Capacity
* Veracel is a joint venture between Fibria (50%) and Stora Enso (50%) and the total capacity is 1,120 thousand ton/year
8
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
Lower dependence on volatile markets such as China
Efficient logistics set up
Low counterparty credit risk
100% certified pulp (FSC and PEFC/Cerflor)
Sales Mix by Region and by End Use - Fibria Highlights
Fibria’s Commercial Strategy
Net Revenues by Region - Fibria
Region – 9M16 End Use - 9M16
39% 41% 43% 39%
28% 24% 24%20%
24% 25% 24%30%
9% 10% 9% 11%
2013 2014 2015 9M16
Europe North America Asia LatAm
52%
29%
19%
Printing & Writing
Specialties
Tissue
Europe39%
N. America
20%
Asia30%
LatAm11%
9
Leadership Position
(1) Fiber Consumption, Recycled Fiber and Pulp: RISI | Market Pulp, Hardwood and Eucalyptus: PPPC Global 100 Report December 2015
Recycled Fiber 242 million t
46% 54%
59%
18% 82%
59% 41%
41%
30% 70%
25%75%
Fiber Consumption412 million t
Pulp 169 million t
Chemical140 million t
Mechanical30 million t
Integrated Mills 83 million t
Market Pulp 57 million t
Hardwood31 million t
Other Eucalyptus Pulp producers:
16 million t
Softwood/Other 26 million t
Acacia/Other 9 million t
Eucalyptus21 million t
Industry Outlook(1)
10
Pulp Supply Agreement: Puma Project
► 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)
► Sales destination: Globally, except for South America
► Operational startup: Mar/2016
► Agreement benefits:
Puma Project
Mutual value creation, with better servicing for both Companies customer’s base
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.
11
Pulp and Paper Market
12
What happened in 2016 ? … Compared to our Forecast
BHKP CAPACITY CHANGES
**Source: Fibria’s estimates **Source: Total year Fibria estimates and PPPC G100 BEKP demand growth Jan-Sep 2016
FIBRIA’S EXPECTED SCENARIO FOR 2016 YEAR-TO-DATE SCENARIO IN 2016 (Jan –Sep)
1004
870
-350
-100
-90
-40
20
30
600
800
BEKP demand growth**
Net
Unexpected Closures,Conversions and Downtime
APRIL Kerinci
Woodland
Old Town (Expera)
Ence Navia
Altri Celbi
Klabin
CMPC Guaiba II
1,3001,500
985
-200
-120
-55
-90
-40
30
660
800
BEKP demand growth**
Net
Unexpected Closures,Conversions and Downtime
APRIL Kerinci
Verso Wickliffe
Woodland
Old Town (Expera)
Altri Celbi
Klabin
CMPC Guaiba II
China, Uruguay, Chile,
Spain and Brazil
Actually... 2016 has been even more “balanced” than previous 2 years !
13
Ratio: Demand Growth /
Net Capacity Increase
2012 2013 2014 2015 2016
Eucalyptus Demand Growth
(Kt)
Hardwood Net Capacity
Increase (Kt)
370
1.305 1.619
1.088
1.300
30
605
1.770
1.450
870
12.33 2.16 0.91 0.75 1.50
Source: PPPC - Global 100 (historical demand), Outlook for Eucalyptus Market Pulp Oct 2016 and Fibria’s estimates
Yet…Prices performance has been much worse than forecasted!
14
BHKP DELIVERED TO EUROPE (USD/T)
* Average until 11/22/16 | Consultants: Hawkins Wright, RISI and Brian McClay (published in the end 2015 for 2016 prices)
758
764756 757 759765
696
671
656
697
1Q16 2Q16 3Q16 4Q16 Annual 2016
Consultants' average end 2015 for 2016 Realized PIX/FOEX
*
*
In our view, there is one major reason for this “lousy” market price scenario: 2016 Global growth has “ONLY” been relying on China
BHKP DEMAND (KT AND % CHANGE, Y-O-Y)
15Source: PPPC Global 100
2013 2014
2015 2016, YTD Jan-Sep
5.3%
5.5%
-0.2%
19.0%
-300
0
300
600
900
1200
1500
Global NA WE China
3.3%
5.2% 2.0%5.2%
-300
0
300
600
900
1200
1500
Global NA WE China
3.3%
-3.5%
3.7%6.2%
-300
0
300
600
900
1200
1500
Global NA WE China
3.0%
-4.7% -2,5%
11.4%
-300
0
300
600
900
1200
1500
Global NA WE China
SO WHAT CAN WE EXPECT IN 2017 ? …SAME AS 2016 ?
BHKP CAPACITY CHANGES
16** Fibria’s estimates | Source: PPPC - Global 100 (historical demand), Outlook for Eucalyptus Market Pulp Oct 2016 and Fibria’s estimates
FIBRIA EXPECTED SCENARIO FOR 2017 IN THE END 2016 SCENARIO IN 2017
Ratio: Demand
Growth / Net
Capacity
Increase
2012 2013 2014 2015
Eucalyptus
Demand Growth
(Kt)
Hardwood Net
Capacity Increase
(Kt)
2016
370
1.305 1.619
1.088
1.300 1.350
30
605
1.770
1.450
870 770
2017
12.33 2.16 0.91 0.75 1.50 1.75
1350
770
-550
-60
-40
-80
-300
-100
100
300
1000
500
BEKP demand growth**
Net
Unexpected Closures,Conversions and Downtime
Navigator Cacia
Resolute Calhoun
Taiwan P&P
APRIL Rizhao
APRIL Kerinci
Metsa
Fibria TLS II
APP OKI
Klabin
17
We don’t think so !Because, we expect a combination of the following factors:
USA: a recovery of the
demand for Eucalyptus
mainly triggered by a
few local HW closures
(temporarily or not)
U$ strengthening / loss
of competitiveness of
local pulp producers
(integrated or not)
Europe: a recovery of the HW demand due to increasing
competitiveness of the European papermakers
Euro devaluation... U$/Euro parity !?
China: an on-going increase of the demand for Eucalyptus Pulp
New paper capacities: 2,3 million tons/y of which:
Tissue = 600 kton/y
UWF = 400 Kton/y
On-going substitution of non wood fibers and old pulp mills
Not only, a good « BEKP Demand/Net Capacity increase » ratio: ≈ 1,75, which is well above the last 3 years
But also, a more WIDESPREAD demand between the regions!
18
Shipments of Eucalyptus Pulp
Global Market BEKP Demand
Paper Capacity increase in China
2014 2015 2016
FORECAST REALIZEDPREVIOUS FORECAST
LATEST FORECAST
LATEST FORECAST
Woodfree 256 256 760 980 1,000
Tissue 1,390 1,278 1,365 965 568
Cartonboard 2,100 1,326 730 900 630
Total 3,746 2,860 2,855 2,845 2,198
Source: Fibria and Independent Consultants
9M16 vs. 9M15(1)
(1) Source: PPPC Global 100 - September/2016
676kt
-114 -171
788kt
173
1,004kt
21 -149
966kt
166
Total North America WesternEurope
China Others
BHKP BEKP
6%
1% -2% -3%
11%
20%
3% 4%
(1) Source: PPPC Global 100 – September/2016
3%
-5%
97%
70%
75%
80%
85%
90%
95%
100%
105%
Jan
-13
Mar
-13
May
-13
Jul-
13
Sep
-13
No
v-1
3
Jan
-14
Mar
-14
May
-14
Jul-
14
Sep
-14
No
v-1
4
Jan
-15
Mar
-15
May
-15
Jul-
15
Sep
-15
No
v-1
5
Jan
-16
Mar
-16
May
-16
Jul-
16
Sep
-16
Min. = 78%
Operating Rate (shipments to capacity) - Hardwood (1)
19
Technical Age and Scale in the Pulp IndustryFurther closures are expected due to lack of adequate investments in the industry…
Hardwood (BHKP) Producers – Integrated and Market Pulp Mills
Softwood (BSKP) Producers – Integrated and Market Pulp Mills
STRONG
Weighted average
technical age 12.3 years
Weighted average
capacity 1,350,000 t/a
Aracruz
Três Lagoas
Veracel
Jacareí
WEAK
STRONGWeighted average
technical age 21 years
Weighted average
capacity 534,000 t/a
North American Pulp Mills Other Pulp Mills
WEAK
More than 6.6 million tons of capacity above 25 years and with annual capacity below 500,000 t/y.
PM Capacity, 1000 t/a
0
500
1000
1500
2000
051015202530
Technical age, years
PM Capacity, 1000 t/a
0
100
200
300
400
500
600
700
800
900
1000
051015202530
Technical age, years
Source: Poyry
20
Source: PPPC. RISI and Public information as of November, 1st
Closures of Hardwood Market Pulp Capacity Worldwide(000 ton)
Capacity closures DO happen
-910
-85
-1,260-1,180
-540-500
-105
-1,085
-445
-315
-985
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016-2018 (1)
(1) Realized closures: as of September 2016 | 2016: -90kt Woodland (USA), -100kt April Kerinci (Indonesia) | 2017: Resolute Calhoun: -40kt, -400kt April Kerinci (Indonesia), -80kt Taiwan P&P | 2017/2018: -275kt Arauco Valdivia (Chile)
Closures do not include temporary movements. Unexpected downtimes this year totaled 130kt (not included in the chart above).
Potential Additional
Conversions
Competitive Cash Production Cost
21
Source: Hawkins Wright (Price Forecast August 2016) and Fibria’s 3Q16 Earnings Release -FX considered by the consultant at BRL/USD = 3.19.
Fibria with Horizonte 2 (H2) cash cost was estimated according to weighted average cost, after mill balance, converted at BRL/USD=3.19. Includes energy sales.
453 437
351 351305 299
232 206155
5254
110
3160 57
5648
57
505 491461
382 365 356
28843
37
7
7
115
92
20
20
408
368
USA China Canada Iberia Indonesia Chile/Uruguay Brazil Fibria 9M16 EstimatedFibria w/ H2 -
2021Cash Cost (US$/t) Delivery CIF Europe
Capex
SG&AIncome tax
Interest
WC=($31/t)
BHKP (USD/t)
BHKP
capacity
(‘000 t)
1,130 1,105 2,075 2,290 4,915 3,420 15,275 TOTAL: 30,210
22
Gross capacity addition should not be counted as the only factorinfluencing pulp price volatility….(1)
Cap
acit
y A
dd
itio
ns
(00
0 t
on
)
0
0,5
1
1,5
2
2,5
0
200
400
600
800
1000
1200
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
BHKP BSKP
Valdivia
APP Hainan
Veracel Nueva Aldea
Santa Fé
Mucuri
FrayBentos
KerinciPL3
Três Lagoas
Rizhao
APP Guangxi
ChenmingZhanjiang
Eldorado
Montes del Plata
Maranhão
Guaíba II
APP South Sumatra(2)
Klabin
OjiNantong
Horizonte 2
Pu
lp p
rice
s -
CIF
Eu
rop
e (U
S$/t
on
)
(1) Source: Hawkins Wright , Poyry and Fibria Analysis. Pulp price estimates according to Hawkins Wright (Apr/16), Brian McClay (Jun/16) and RISI (Apr/16)(2) Partially integrated production.(3) Source: Bloomberg
Spread @Nov 22nd: US$154/t(3)
In the last 15 years, pulp volatility has been just 8%...why?
23
► Market price closer to producer’s marginal cost
► The marginal cost producers are based in Europe and North America
► Flattish industry cost curve
► Higher flexibility to adjust supply side during imbalanced market
► Lower dependency on Asian market (~25%) compared to hard commodities (70%+)
► Market end users are linked to consumer goods, such as tissue
► Incipient pulp price futures market and low liquidity
Source: Bloomberg – November 22nd, 2016
0
40
80
120
160
De
c-9
9A
pr-
00
Au
g-0
0D
ec-
00
Ap
r-0
1A
ug-
01
De
c-0
1A
pr-
02
Au
g-0
2N
ov-
02
Mar
-03
Jul-
03
No
v-0
3M
ar-0
4Ju
l-0
4N
ov-
04
Mar
-05
Jul-
05
No
v-0
5M
ar-0
6Ju
l-0
6N
ov-
06
Mar
-07
Jul-
07
No
v-0
7M
ar-0
8Ju
n-0
8O
ct-0
8Fe
b-0
9Ju
n-0
9O
ct-0
9Fe
b-1
0Ju
n-1
0O
ct-1
0Fe
b-1
1Ju
n-1
1O
ct-1
1Fe
b-1
2Ju
n-1
2O
ct-1
2Fe
b-1
3Ju
n-1
3O
ct-1
3Ja
n-1
4M
ay-1
4Se
p-1
4Ja
n-1
5M
ay-1
5Se
p-1
5Ja
n-1
6M
ay-1
6Se
p-1
6
BHKP - FOEX Europe (base 100) CPI (base 100)
24
Lowest volatility among commodities
Source: Bloomberg – November 25th, 2016
Low volatility of hardwood pulp price, even though
new capacities have come on stream during the period.
20
50
80
110
140
170
200
230
Jan
-12
Feb
-12
Ma
r-1
2
Ap
r-1
2M
ay-1
2
Jun
-12
Jul-1
2
Au
g-1
2
Se
p-1
2
Oc
t-1
2
No
v-1
2D
ec
-12
Jan
-13
Feb
-13
Ma
r-1
3
Ap
r-1
3M
ay-1
3
Jun
-13
Jul-1
3
Au
g-1
3
Se
p-1
3O
ct-
13
No
v-1
3D
ec
-13
Jan
-14
Feb
-14
Ma
r-1
4
Ap
r-1
4M
ay-1
4
Jun
-14
Jul-1
4
Au
g-1
4
Se
p-1
4O
ct-
14
No
v-1
4D
ec
-14
Jan
-15
Feb
-15
Ma
r-1
5
Ap
r-15
Ma
y-1
5
Jun
-15
Jul-1
5
Au
g-1
5
Se
p-1
5O
ct-
15
No
v-1
5D
ec
-15
Jan
-16
Feb
-16
Ma
r-1
6
Ap
r-1
6M
ay-1
6
Jun
-16
Jul-1
6
Au
g-1
6
Se
p-1
6
Oc
t-1
6
No
v-1
6
Iron Ore Soy Bean Crude Oil Sugar BHKP - FOEX Europe Exchange Rate (R$/US$)
100
183
855747
100 = January 1, 2012
37% 35% 34%
27% 26% 25% 24% 23%
17%14%
6%
WTI Crude Oil Sugar Nickel Iron Ore Copper Soy Ibovespa LME Metals Cattle FX BHKP
2Since January 1, 2009 up to November 25th, 2016
Historical Volatility of Commodities (US$) 2 – Lower than FX
87
25
Financial and Operational Highlights
26
Each 5% depreciation of the Real increases EBITDA by aroundR$420m and FCF by R$550m
815
1,488
1,173 1,1531,295 1,185
1,560
1,241
2009 2010 2011 2012 2013 2014 2015 3Q16 LTM 2016 (e)
Exchange Rate Average (R$/US$)
EBITDA Margin
EBITDA (US$ million)
Fibria net pulp price(US$/t)
Fibria net pulp price(R$/t)
2.00 1.76 1.67 1.95 2.16 2.35 3.33 3.62 3.45(1)
456
670 639 581 610 572 582
528 506(2)
29%
40%34% 36%
40% 39%
53%48%
912 1,179 1,067 1,133 1,311 1,3441,951 1,911 1,746
(1) According to Focus Report (Brazilian Central Bank – November 25th, 2016) I (2) 2016 market consensus
27
Cash Production Cost (R$/t) – 3Q16
659 662
624
638
3Q15 2Q16 3Q16
- 4%
Operational stability Wood FX
• X
659 638
(55) 27 14 ( 10 ) ( 7 ) 6 4
3Q15 Maintenancedowntimes
Wood Utilities Chemicals andenergy
FX Materials andServices
Others 3Q16
-3.2%
Cash Production Cost (R$/t) – 3Q16 LTM
Ex-downtime
28
Cash Production Cost in dollars saw a decrease over the past 7 years
But lately, it has been
influenced
by non-recurring
effects:
Wood
Energy price
Input consumption
Consistently
controlling the cash
production cost
Fibria’s Cash Production Cost(1) (USD/ton)
231
264281
242 234220
186 184
2009 (2) 2010 (2) 2011 2012 2013 2014 2015 3Q16LTM
1.99 1.76 1.67 1.95 2.16 2.35 3.33 3.62Average
FX (BRL/USD)
(1) Excludes Conpacel
Net Results (US$ million) – 9M16
29
(1)
827
494493
192(85)
(395)
(394)
(144)
AdjustedEBITDA
FX Debt MtMhedge
NetInterest
Deprec., amortiz. and
depletion
Taxes Others NetIncome
Non-recurring effects
∆∆
deferred
current
(1) Includes other Exchange rate/monetary variations, other financial income/expenses and other operating income/expenses.
30
234
124
( 172 ) ( 18 ) 101
( 21 ) ( 0 )
Adjusted EBITDA Capex(ex-H2 project
and pulp logistics)
Net interest Working capital Income tax Others FCF(2)
(1) Does not consider Horizonte 2 Project and pulp logistics projects.(2) Includes other financial results.
KlabinEffect
Free Cash Flow – 3Q16 (1) (US$ million)
31
ROE and ROIC (R$)
ROE = Adjusted EBIT(1)/ Equity before IAS 41(2) ROIC = Adjusted EBIT(3)/ Invested Capital before IAS 41(2)
(1) Adjusted EBITDA – CAPEX – Net Interest – Taxes (2) International accounting standards for biological assets.(3) Adjusted EBITDA – CAPEX – Taxes
AverageFX
(R$/US$)1.95 2.16 2.35 3.33 3.62 1.95 2.16 2.35 3.33 3.62
AverageNet Pulp
Price(US$)
581 610 561 586 531 581 610 561 586 531
AverageFX
(R$/US$)
AverageNet Pulp
Price(US$)
3.4%5.7% 6.2%
25.1%
16.1%
2012 2013 2014 2015 3Q16UDM
6.9%9.2%
8.0%
22.8%
15.6%
2012 2013 2014 2015 3T16UDM
32
Indebtdeness
(1) Considering the portion of debt in reais fully adjusted by the market swap curves at the end of each period.
Gross Debt and Cash Position (R$ million)
473414 408
350
268
200141 158
96143
10878
45 39 39 54
2009 2010 2011 2012 2013 2014 2015 3Q16 LTM
6.3 5.95.5 5.2
4.6
3.4 3.3 3.3
Interest Expense (Gross)Average cost in US$ (% p.a.)
Net Debt (Million) and Leverage
Interest Expense/Income (US$ million) and Cost of Debt in US$(1)
12,526 12,70514,192
818 2,983 3,572
Sep/15 Jun/16 Sep/16
Gross debt Cash
9,578 9,722 10,620
2,411 3,029 3,272
Sep/15 Jun/16 Sep/16
R$ US$
2.07
1.822.33
1.58
2.102.64
Net Debt/EBITDA (R$) Net Debt/EBITDA (US$)
Interest on Financial Investments
6.3 5.95.5
5.24.6
3.4 3.3(1)
Cost of debt
33
Robust Liquidity – USD million(@October 31, 2016)
0.4
1.20.20.1
0.1
0.30.1
1.2
0.6
0.2
0.10.3
ExportPrepayment
ARC BNDES (2) FDCO ECA Working capitalrelease (3)
Total
997
547
106
323
541
1,000763
600
94
335
666
64 22 15
Liquidity 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Export Prepayment BNDES ECN ACC/ACE Voto IV Bonds Finnvera CRA and Others
Cash on hand (1)
1,544
Revolving
H2 capex to be disbursed(1): USD 1.3 bn Funding to be withdrawn: USD 1.2 bn
2.4
HORIZONTE 2 FUNDING (USD BILLION)
Funds withdrawn until Oct 31, 2016
Contracted funds to be withdrawn
3Q153Q15
0.1 - 4Q16
0.5 - 2017
0.2 - 4Q16
0.1 - 20170.3 - 4Q16
Capex H2 (2): 277 982 80
Not including USD17 million related to MtM of hedging transactions. | (2) Capex disbursement of USD916 million up to October 31, 2016. Actual and forecast FX BRL/USD of 3.46 and 3.23, respectively.
Horizonte 2
Project
USD 2.3 bn
Excess of
USD 0.1 bn
New CRA
+USD 0.4 bn
(1) Horizonte 2 Project capex to be disbursed (cash). | (2) BRL423 million withdrawn on October 18, 2016. | (3) Related to the agreement with Klabin.
34
Zero refinancing risk up to 2018… not including FCF generation!
1.0
0.4
0.3
0.5
(1.0)0.6
0.20.1
0.3(1.3)
Cash PositionOct./2016
Debtamortizations
2016-2018
BNDES FDCO ECA Workingcapitalrelease
4th CRA CapexHorizonte II
Cash PositionEnd 2018
(1) 4th CRA FX BRL/USD 3.2462 (closing FX 3Q16)
2016 - 2018
Revolving
Cash on
hand
H2 Funding
1.5
Cash on
hand
USD BILLION
35
Initiatives for Leverage Management
Amount
Net
Debt/EBITDA
reduction
(USD
million)(x)
Working Capital Release 95 0.09x
Accounts receivable (customers) 40 0.04x
Accounts payable (suppliers) 55 0.05x
Capex 96 0.10x
Forestry 31 0.03x
Capex H2 65 0.07x
Total 191 0.19x
Initiatives expected to be implemented
in the short term
Initiatives under analysis
Amount
Net
Debt/EBITDA
reduction
(USD
million)(x)
Accounts payable (suppliers) 420 0.37x
Others 110 0.12x
Total 530 0.49x
Total: USD 721 million (0.68x)
36
Waiver on 4.5x Covenant was Fully NegotiatedHorizonte 2 start up in 4Q17 boosts EBITDA and FCF generation
Leverage guidelines:
Range of 2.0x to 2.5x net debt/EBITDA
Maximum 3.5x net debt/EBITDA during expansion
cycles
Highlights:
Covenants only triggered if Fibria loses the
Investment Grade by 2 of the 3 rating agencies
During the most critical periods of expansion, 4.5x
covenant was waived
NET DEBT/EBITDA (USD)
1.86 2.10
2.64
4.5 4.5
1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 2018 2019
Actual (in US$)
Covenant level Waiver
3.5x
2.0x – 2.5x
Indebtness and
Liquidity limits (1)
(1) As stated on the Liquidity and Indebtedness Policy and Shareholders Agreement
37
Capital Structure: Fibria has achieved the lowest leverage ratio among its Latin American peers
Net Debt/EBITDA (x)(1)
Fibria Arauco CMPC Klabin Suzano
S&P BBB-/Negative BBB-/Stable BBB-/Stable BB+/Stable BB+/Stable
Moody’s Ba1/Negative Baa3/Stable Baa3/Stable - Ba2/Stable
Fitch BBB-/Stable BBB/Stable BBB+/Stable BBB-/Negative BB+/Positive
(1) Fibria’s historical data in BRL.
2.3
2.4
5.1
3.43.6
8.1
4.2
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16
Fibria Suzano Klabin CMPC Arauco Eldorado
38
One of the best performances among Brazilian corporate issuers(1)
(1) G-spread on November 17th, 2016
Historical G-spread (bps)
BBB-
BBB-
Rating Outlook
Negative
Stable
0
200
400
600
800
1000
1200
1400
2010 2011 2012 2013 2014 2015 2016
Fibria 2020 - 7.5% Fibria 2021 - 6.75% Fibria 2024 - 5.25%
281 287 301 309 319 345 385 395 418471 512
1,307
BRAZIL BRFOODS GLOPAR EMBRAER VALE FIBRIA KLABIN BRASKEM SUZANO GERDAU PETROBRAS ELDORADO
39
2017 OUTLOOK - CAPEX AND CASH COST
1,971
2.055
2016 GuidanceUpdate
∆ Inflation FX Others 2017 Guidance
Fibria CAPEX 2017, except H2 Project – BRL million
40
(1) Converted at 3Q16 LTM FX – BRL/USD 3.62 | (2) Converted at 2017 average FX - BRL/USD 3.40, according to Focus Report (Brazilian Central Bank – November 18th, 2016)
(3) Subject to Board approval
USD544 mn(1)
USD621 mn(2)
(3)
Structural CAPEX – BRL million
41
(1) Converted at 2017 average FX - BRL/USD 3.40 - According to Focus Report (Brazilian Central Bank – November 18th, 2016)
(2) Subject to Board approval
2.055
1.662
2,068
2017Guidance
Modernization Non-recurringwood purchase
Forestryequipments
Non-recurringprojects
Turbogeneratoroverhaul
Structuralcapex
H2 sustainingcapex
Structuralcapex with H2
USD
621 M(1)
USD
489 M(1)
USD
608 M(1)
(2)
Cash Cost update (USD/t) @2021BRL/USD 3.19
42(1) Converted at 3Q16 LTM FX at BRL/USD 3.19
206
155 (26) (19) (2) (1) (3)
LTM 3Q16 Horizonte 2Project
Wood costreduction
Bleaching line B Maritime woodshipping project
Others 2021
FX Cash cost (US$/t)
3.00 164
3.10 159
3.19 155
3.30 150
3.50 142
FX Sensitivity
43
Expansion Project – Horizonte 2
44
• 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
Commercial
positioning
Long-term growth
potential
What is the importance of growth for Fibria?
• Wider fixed costs dilution
• Cost curve position improvement
• Greater bargaining power with suppliers
45
Fibria’s nominal capacity
5,300 5,300 5,300 5,300 5,300 5,300
900 900 900 900 900 900
300
1,740 1,850 1,950 1,950 1,950
2017 2018 2019 2020 2021 2022
Horizonte 2 ('000 t)(1)
Klabin's Puma Project ('000 t)(1)
Current Production ('000 t)
ESTIMATED MARKET BHKP CAPACITY RANKING 2017 (000T)
6,500
7,940 8,050 8,150 8,150 8,150
Source: RISI, Hawkins Wright, PPPC and Fibria (Nov 2016)
0 2000 4000 6000 8000
Domtar
Soedra
Klabin
International Paper
Lwarcel
Resolute
Verso
Georgia Pacific
Woodland
Navigator
Metsä
Oji
Nippon
Ilim
Marubeni
Mondi
Altri
Ence
Cenibra
Stora Enso
Arauco
Eldorado
UPM
CMPC
April
Suzano
APP
Fibria 8,150
Current Capacity
New Capacity
New Capacity – Klabin Agreement
New Capacity – Horizonte II Project
(1)The volumes in 2016, 2017 and 2018 will depend on the learning curve of the plants. The agreement with Klabin may be renewed by mutual consent.
46
Pulp sales destination: Fibria growing where the market grows
(1) Considers 3Q16 last twelve months. | (2) Includes Klabin’s sales volume
37%
36%
40%
27%
19%23%
8%10%
Total sales volume distribution
after H2 start up(2)
Current net revenue distribution(1)
47
Horizonte 2 Project
Site Overview
47%of financial execution
- cash disbursement
(BRL 3.5 billion)
71%overall completed
Energy Surplus
130 MWh
Start-up
beginning of
4Q17
Expansion
Capex of
USD2,254 M (USD1,156/t)
48
H2 Project Evolution – “S” CurveExecution performance better than forecasted
(1) Capex disbursement (cash).
General Progress Curve – Horizonte 2
0,0
20,0
40,0
60,0
80,0
100
0,0
2,0
4,0
6,0
8,0
mai jun jul ago set out nov dez jan fev mar abr mai jun jul ago set out nov dez jan fev mar abr mai jun jul ago set out
2015 2016 2017
Update:
16-Oct-31
Startup
beginning
4Q17
% month % accumulated
Forecast Actual Projected -
accumulated.
Realized Ac -
accumulated
49
H2 Project TimelineMain next steps to startup
Beginning of harvest
(Jan 17)
Startup
(4Q2017)
Beginning of
infrastructure and
purchase of the TGs
Purchase of the
industrial plants
Negotiations with
concession holders
and Port of Santos
tendering
Hiring of
operational team
Beginning of
construction
Beginning of
assembly Beginning of
forest
machinery
deliveries
Definition of
outbound logistics
formats
Initial hiring of
harvest workers
Beginning of the commissioning
of water treatment station
(Dec 16)
Hydrostatic test of the
Recovery Boiler
(Apr 17)
Start of nursery
operations
(Mar 17)
Commissioning and
testing of industrial
plant
2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
2015 2016 2017
50
Already planted since project approval
125,000 ha
To be planted
62,000 ha
Total
187,000 ha
Wood purchased
5.0 million m3
7,000 ha to be planted in 2016
55,000 ha to be planted in 2017 and 2018
Average distance from forest to mill H1 + H2 up to 100 km
Horizonte 2 Forestry BaseForestry base secured as planned
51
Logistics
Mato Grosso
Mato Grosso do
Sul
Goiás
Brasilia
Port Terminal 32
52
CapexFlexibility in the Timetable, without changing the startup date
TOTAL CAPEX (BRL BILLION) CAPEX DISBURSEMENT TIMETABLE (BRL MILLION)
2,616 2,686
1,122380
205
3,859
3.170
257
2015 2016 2017 2018
BRL EUR USD
6,334 5,629
1,6571,526
754
337
8,745
7,492
Nov. 2015Forecast
CurrentForecast
3%
52%
42%
- BRL 1,253 mn
73%
19%
8%
75%
20%
5%
USD 2.396 bn(1) USD 55 mn USD 982 mn USD 79 mn
(1) FX = 3.65 BRL/USD on previous forecast. FX = 3.32 BRL/USD on current forecast. (2) Average FX according to capex execution.
USD 2.254 bn(1)
3.72FX(2) 3.23 3.26
3%
3.39
USD 1,194 mn
53
8,745
3,168
4,324
7,492
November, 2015 Savings,Contingencies
and indirect costs
FX Inflation Others October, 2016
To be
disbursed
Executed
USD 2,214 USD 2,259
BRL/USD 3.95 BRL/USD 3.32
BRL/
USD
3.23
BRL/
USD
3.46
Historical Horizonte 2 Project Capex (USD million)
54
FundingCost and maturity
Amortization Schedule (2) – 3Q16 Proforma with TLS II – US$ million
3Q16 2Q16 + H2
Average Cost (US$ p.a)(1)
Average Maturity (years)
3.3%
4.1
3.1%
4.5
H2
2.6%
6.1
(1) Considering swap curves. | (2) FX considering new funding for the TLS II Project: 3.2098
228
315
536
868
732
577
76
317
648
4614 14
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Pre-Payment BNDES ECN Voto IV Bonds Finnvera CRA & Other
55
Horizonte 2 project assumptions
(1) Includes chemical leasing and to increase capacity to 1,950 kt/year (FX BRL/USD @3.32)
(2) Estimated sustaining capex in perpetuity (FX BRL/USD @ 3.30)
(3) Estimated weighted average cost, after mill balance. Includes energy sales (FX BRL/USD @3.30)
Pulp production/year k tons 1,950 1,950
Expansion capex(1) $ billion 7,492 2,254
Expansion capex(1) $/t 3,854 1,156
Sustaining capex(2) $/t 208 63
Cash production cost(3) $/t 340 103
Energy surplus MWh 130 130
Project approval FX BRL/USD 2.80 -
All in cash cost (estimated range)(4) $/t - 270-320
Net pulp price(5) $/t - 490
Free Cash Flow (estimated) $/t - 170-220
Payback period (estimated) years - 5.3-6.8
(4) Cash cost + freight + SG&A + Sustaining Capex + Interest + taxes (FX BRL/USD @3.30)
(5) 2017 market consensus.
56
Final Remarks
• Economies of scale
• Synergies with current operations
• Wood availability and low distance from forest to mill
• Fibria’s total energy surplus to be increased by 130 MWh
• Cash cost competitiveness
• Meet customers’ demand growth
• Attractive returns even in adverse scenarios of pulp price and BRL
• Solid financial profile
57
BACK UP
58
Dividends
59
►Indebtedness and Liquidity ►Market Risk Management►Risk Management►Corporate Governance►Related Parties Transactions►Anti-Corruption►Information Disclosure►Securities Trading►Antitrust►Genetically Modified Eucalyptus►Dividend Policy►Sustainability
Policies approved by the Board of Directors
60
Approval of Dividend Policy
►Proposed dividends based on cash generation, taking into considerationthe company’s strategic planning and in line with its policies, notably the
Indebtness and Risk Management policies.
►Preserving Investment Grade.
Commitment to Corporate Governance best practices.
Extraordinary dividend if Policy criteria are met.
61
Dividends
(1) Considering March 7, 2016 FX – R$/US$3.7714
DIVIDEND YIELD AT DEC 31, 2015 = 7.5% (BRL) | 8.3% (USD)
2016
April 27, 2016 Mid-May, 2016 Mid-November, 2016 Mid-December, 2016
GSM approved dividend
distribution of USD80 million(1)
(1.1% of dividend yield as at
Dec. 31, 2015).
Dividend payment
of USD 80 million.
Extraordinary
dividend
appraisal
Extraordinary
dividend
payment
(if approved)
2017
April, 2017 Mid-May, 2017 Mid-November, 2017 Mid-December, 2017
OGM to approved
dividend
distribution
Dividend payment
to occur from May
onwards
Extraordinary
dividend
appraisal
Extraordinary
dividend
payment
(if approved)
62
Dividends vs. Leverage
148
2,000
304
2.30
1.95
1.58
1.781.86
2.10
2.64
0,00
0,50
1,00
1,50
2,00
2,50
3,00
1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16
Dividends (R$ million) Leverage (x)
63
Historical Dividend Yield(1)
(1) Source: Bloomberg – Financial Analysis - Multiples
ConsideringMarket Capas ofDecember, 31st, 2015
64
Best dividend yields of 2015 among Brazilian corporate issuers
Source: Economática – the dividend yield calculation considers share price at the beginning of 2015
Dividends per share (R$)
Dividend Yield(%)
Cesp 4.85 20.78
Fibria 3.88 11.60
Santander BR 0.46 9.81
Qualicorp 1.89 7.02
MRV 0.39 5.55
BBSeguridade 1.68 5.53
TelefBrasil 2.73 5.32
Natura 1.48 4.67
Braskem 0.61 4.64
CSN 0.41 4.48
65
Cost reduction initiatives and industry statistics
66
Structural Competitiveness
1. Third-party wood reduction
2. Forestry operations productivity
3. Industrial
NPV: US$0.7 billion
NPV: US$0.6 billion
NPV: US$0.1 billion
Total : US$1.4 billion
THIRD-PARTY WOOD REDUCTIONNon-recurring impacts starting to decrease
Third party wood increase from previous forecast due to recent rain shortage at Aracruz Unit forest base and optimization of Três Lagoas forest base
The average distance will drop sharply generating an Opex reduction
67(1) Does not include Veracel but considers H2 Project forest base | (2) FX @ BRL/USD3.30.
NPV from peak to normalized level(2):CAPEX: BRL1.5 billion (USD 0.5 million) | OPEX: BRL 1.0 billion (USD 0.3 million)
Total NPV:
BRL2.5 Bn or USD0.8 Bn
788Th
ird
-par
ty w
oo
d (
%)
225193 197 187 181 194
242
311 307 290239
190 173 170 167 166 164
0
50
100
150
200
250
300
350
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Average distance from forest to mill
Third-party wood
Averag
e distan
ce from
forest to
mill (km
)
68%34% 63% 73% 67% 75% 67%% Planting
► Most part of the standing wood was already paid
► Despite the higher forest to mill distance, the wood from Losango is less expensive than the
available wood from around Espírito Santo and Bahia States
► Positive impact over industrial costs due to better productivity
1. Third-party wood reduction
Losango
68
The distribution costs by classes help us to apply resources in order to optimize wood production
10%
20%
40%
20%
10%10%
36%33%
15%
6%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
01 - Diamond 02 - Gold 03 - Silver 04 - Bronze 05 - Lead
Current effective area Future effective area
2. Forestry operations productivity
CLASSIFYING THE FOREST BASE BY CATEGORIES
Structural change improving competitiveness
69
Possible Restrictions
Declivity
0: Higher than 35°
1: Btw 24°and 35°
2: Btw 0° and 24°
ConservationAreas
0: Within CAs(1)
1: Within EPA(2) andEBZ(3)
2: Out of EPAs andEBZ
Municipal Restrictions
0: Total restrictions1: Partial restrictions2: No restrictions
EPA Altitude
0: Higher than1800m1: Lower than1800m
Urban Zones
0: Urban Zones1: Outside urbanareas
Remnants ofnativevegetation
0: Remnants areas1: Outside remnantsareas
Possible Impediments
Possible combinations
X 0, 1 and 2, removed;
4 e 8, high potential(1) Conservation Areas(2) Envionmental Protection Areas(3) Environmental Buffer Zones
2. Forestry operations productivity
Identifying opportunities based on these combinations
70
Roads
Transportation
SilvicultureHarvest
2. Forestry operations productivity
Cost and Capex KPIs were also included in this geo-model
71
Mixed Harvest Mechanization (Hilly areas)
2. Forestry operations productivity
► Mixed cutting operation with high demand for MO and high risk to safety;
► Harvest limitations in areas above 24 degrees;
► Increase annual capacity to harvest in areas up to 35 degrees , previously "locked up" by harvesting capacity of manual staff;
► NPV: R$71 million
► Capex: R$5 million
► Operational since Aug 2015
PROJECT DESCRIPTION (JACAREÍ UNIT)
Harvest
72
PIFF
► Freight cost reduction;
► Increased load box for timber/woodchip transport
► Use of lightweight steel;
► Operational risk reduction (flipping);
► Investment: R$33 million
► NPV: R$139 million
► Startup: 2015 / 2016
PROJECT DESCRIPTION (ARACRUZ, JACAREÍ AND TRÊS LAGOAS UNITS)
Timber transportation Woodchip transportation
2. Forestry operations productivity
Transportation
73
Maritime Wood Shipping Project
► Capex and Opex reduction;
► Increase in cargo handling due to increase in
stack height volume
► Reduction in heavy truck road traffic
► Capex: R$38 million
► NPV: R$95 million
► Startup: Jan/2017
PROJECT DESCRIPTION (ARACRUZ UNIT)
2. Forestry operations productivity
Transportation
74
10%
30%
50%
70%
90%
100%
0%
20%
40%
60%
80%
100%
2015 2016 2017 2018 2019 2020
2. Structural change in forestry operations productivity
• Structural cost reduction of R$170 million per year (Capex + Opex) in 2020;
• NPV of approximately R$2 billion
• Seek opportunities for purchase / lease of more attractive areas, divest from unattractive land/forest, as well as the implementation of
technologies that will lead us to the structural cost
NPV Expected Curve
75
3. Industrial: maintenance downtimes schedule change
► Regulatory Standard 13 (Boiler and Pressure Vessel Inspection) extended the maximum period between recovery boiler inspections from 12 to 15 months.
► Fibria was the first company to use the extended period benefit
► NPV: R$385 million
76
Biological Sludge Dryness Process
3. Industrial: Biological Sludge Dryer
► Variable cost reduction associated
with the disposal of sludge operations
in external landfill
► Capex: R$18 million
► NPV: R$100 million
► Startup: Dec./2016
PROJECT DESCRIPTION (JACAREÍ UNIT)
Operational Flow – Conditioning and biological sludge burn
•00Effluent+Sludge
Aeration Tank
Biological
Sludge Tank
•00Biomass Pile
Sludge Dryer
Biomass
Boiler
Sludge drying and burn in biomass boiler
77
78
Global Market Pulp Demand
Demand growth rateHardwood (BHKP) vs. Softwood (BSKP) (000 ton)
Hardwood demand will continue to increase at a faster pace than Softwood
Source: PPPC report (Sept. 2015) Source: PPPC reports. Excludes Sulphite and UKP market pulp (Sept./15)
0
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
Hardwood Softwood
2014 - 2019 CAGR:Hardwood: +2.5%Softwood: +0.8%
000 ton 1999 2009 2019
Growth
1999-
2009
Growth
2009-
2019
Hardwood 16.3 24.8 33.8 52% 36%
Eucalyptus 6.0 15.9 24.1 165% 52%
Softwood 19.0 21.4 24.9 13% 16%
Market Pulp 35.3 46.2 58.7 30% 27%
Paper Production – Runnability with BHKP
Source: RISI conference, August 2014.
79
World Tissue Consumption, 1995-2015(3)
Per Capita Consumption of Tissue by World Region(3)China's Share of Market Pulp(2)
10% 10%12% 14%
21%
17%
22%23% 23% 24%
25%
0
2
4
6
8
10
12
14
0%
5%
10%
15%
20%
25%
30%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Eucalyptus Hardwood Total % Compared to the global Market Pulp
(Kg/capita/year)
(million t) (kg/person/year)
Between 2005 and 2015, the Chinese market share of eucalyptus shipments increased by 20 p.p. (total market pulp: + p.p.)
0
5
10
15
20
25
30
35
40
1995 2000 2005 2010 2011 2012 2013 2014 2015N.America W.Europe E.Europe JapanChina Asia FE Middle East LatAmAfrica Oceania
Annual Growth Rate +3.7%
Benefiting From China’s Growth
(1) PPPC – Pulp China – Flash Report – September 2016(2) PPPC – W20. Coverage for chemical market pulp is 80% of world capacity (3) RISI
(million t)
Latin America is the leading exporter of BHKP to China, accounting to approximately 55% of China's total imports in 9M16.
(‘000s t)
(1) includes South Africa and New Zealand. | (2) Includes China, Japan, Malaysia, Russia, Thailand and Vietnam.
China’s Hardwood Imports of BHKP by Country(1)
6.937
3.701
1.558 1.374
147 151 6
7.725
4.266
1.465 1.667
142 145 40
BHKP Total LatinAmerica (1)
Indonesia Others(2) USA Canada WesternEurope
9M15 9M16
25
15 15
11
6 65
1
N.America
WestEurope
Japan Oceania EastEurope
LatAm China Africa
80
Growth rate Chinese GDP vs. Eucalyptus Shipments to China (Sept-09 = base 100)
Source: Bloomberg and PPPC – W20 report.
74
199
-
50
100
150
200
250
China GDP Eucalyptus Shipments
81
Commodities Differentiation
China GDP breakdown
China commodity demand - basis 100
49% 49% 48% 49% 49% 50% 50% 52% 51% 53% 53%
44% 47% 48% 48% 48% 48% 48% 46% 47% 45% 45%
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
201194172
152
124115
Source: Itaú Macroeconomic Department and PPPC – Oct/15
82
Global Paper Consumption
CAGR 2000 – 2010Developed Markets: - 2.1%Emerging Markets : + 5.6%
P&W Consumption (000 tons)(1)
Tissue Consumption (000 tons)(1)
CAGR 2010 – 2020Developed Markets: - 3.1%Emerging Markets : + 0.9%
CAGR 2000 – 2010Developed Markets: + 1.5%Emerging Markets : + 6.6%
CAGR 2010 – 2020Developed Markets: + 1.4%Emerging Markets : + 5.9%
Source: RISI
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
E
20
16
E
20
17
E
20
18
E
20
19
E
20
20
E
Developed Markets Emerging Markets
99,977103,286117,611 109,758
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
E
20
16
E
20
17
E
20
18
E
20
19
E
20
20
E
Developed Markets Emerging Markets
20,979
30,357
41,712
83
Shipments of Eucalyptus Pulp
Global Market BEKP Demand
(1) Source: PPPC World 20 – January/2015
(1) Source: PPPC World 20 – December/2015
CAGR 2012-2015
3,787kt
387 kt662 kt
1,980 kt
758 kt
8%
7%
3%
19%
6%
Total North America Western Europe China Others
84
Benefiting From China’s Growth
Ship
men
ts (
00
0 t
on
)
BH
KP
pri
ces
-C
IF C
hin
a (U
S$/t
on
)
(‘000s t)
China: Eucalyptus pulp shipments
2010
average:
250 ktons
2011
Average
379 ktons
2012
Average
370 ktons
2013
Average
439 ktons
2014
Average
504 ktons
2015
Average
538 ktons
2016
Average
619 ktons
Source: PPPC Global 100
0
100
200
300
400
500
600
700
800
900
0
100
200
300
400
500
600
700
800
900
mai
-10
jun
-10
jul-
10
ago
-10
set-
10
ou
t-1
0o
ut-
10
no
v-1
0d
ez-1
0ja
n-1
1fe
v-1
1m
ar-1
1ab
r-1
1m
ai-1
1ju
n-1
1ju
l-1
1ag
o-1
1se
t-1
1o
ut-
11
no
v-1
1d
ez-1
1ja
n-1
2fe
v-1
2m
ar-1
2ab
r-1
2m
ai-1
2ju
n-1
2ju
l-1
2ag
o-1
2se
t-1
2o
ut-
12
no
v-1
2d
ez-1
2ja
n-1
3fe
v-1
3m
ar-1
3ab
r-1
3m
ai-1
3ju
n-1
3ju
l-1
3ag
o-1
3se
t-1
3o
ut-
13
no
v-1
3d
ez-1
3ja
n-1
4fe
v-1
4m
ar-1
4ab
r-1
4m
ai-1
4ju
n-1
4ju
l-1
4ag
o-1
4se
t-1
4o
ut-
14
no
v-1
4d
ez-1
4ja
n-1
5fe
v-1
5m
ar-1
5ab
r-1
5m
ai-1
5ju
n-1
5ju
l-1
5ag
o-1
5se
t-1
5o
ut-
15
no
v-1
5d
ez-1
5ja
n-1
6fe
v-1
6m
ar-1
6ab
r-1
6m
ai-1
6ju
n-1
6ju
l-1
6ju
l-1
6ag
o-1
6se
t-1
6o
ut-
16
85
Global BHKP Market Pulp Supply Cost Curve
Source: Pöyry.
COST CURVE EVOLUTION
USD
/Ad
t, 2
01
3 c
ost
leve
l
Cumulative Capacity Million t/a
Cost position of marginal
producer
86
Tightening plantation wood and chip supply could add to the cash cost of Asian pulp mills
Source: Pöyry.
87
Current Zero Cost Collars
Notional (Total):
USD 1,960
Million
ZCC Position 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Total
Notional (USD MM) 335 376 304 365 315 190 45 30 1,960
Strike put (avg.) 3.33 3.29 3.35 3.31 3.47 3.45 3.51 3.53 3.36
Strike call (avg.) 6.31 5.08 5.35 5.42 6.09 5.04 5.43 5.41 5.57
FWD (BRL/USD) EoP 3.37 3.45 3.53 3.60 3.67 3.73 3.80 3.87 0
*forward curve Nov/2016.
FREE CASH FLOW(1)
Positive quarterly FCF in the last 5 years, even during appreciated FX
88
USD million
EBITDA Margin
Average FX
-77
-7
125
29
77
194
84113
53
329
4
111
51
103130
112
317
225
158118 124
3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16
33% 28% 30% 37% 37% 41% 39% 39% 41% 42% 41% 35% 35% 45% 50% 50% 56% 54% 52% 43% 43%
1.63 1.80 1.77 1.96 2.03 2.06 2.00 2.07 2.29 2.27 2.37 2.23 2.27 2.55 2.87 3.07 3.45 3.84 3.90 3.51 3.25
(1) Excluding H2 Project, dividends, pulp logistics and land purchase effects.
89
Fibria’s tax structure
(1) Considering FX 3.2460 | (2) Considering average FX for the period
Description and Amount Maturity
(a) Operating income As stated in the income statement
(-)(b) Goodwill (Aracruzacquisition)
- Annual tax deduction: US$ 27 million (tax)
- Remaining Balance Sept/16: US$ 0.196 billion (base)2018
(-)(c) Forestry Capex in MS state (net)
2016 tax deduction related to depletion: US$ 21 million Undefined
(+/-)(d) Exchange variation(cash)
---------- ----------
(+/-)(e) Other ---------- ----------
Tax base beforecompensations
(a) + (b) + (c) + (d) + (e)
(f) (-) Tax loss carryforward- Up to 30% of tax base before compensations
- Balance up to Sept/16: US$ 382 million (base)Undefined
(g) Tax base Tax base before compensations – tax loss carryforward (f) ----------
(h) Income tax Tax base (g) * 34% ----------
(i) (-) Federal tax credits
Balance June/2016:-PIS/COFINS: US$ 218 million
-Advanced tax payment (IR and CSLL): US$ 315 million- Reintegra: US$ 26 million
Undefined
Cash Tax Income Tax (h) – tax credits (i)
2010 2011 2012 2013 2014 2015 9M16
US$ 9 million US$ 2 million US$ 8 million US$ 14 million US$ 12 million US$ 23 million US$ 28 million
TAX PAYMENT(2) (cash basis)