3Q16 Results

2

Disclaimer

The statements in this presentation constitute projections or forward-looking

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

uncertainties that could cause the expectations expressed to not materialize

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

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

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

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

competitors, foreign currency fluctuations and changes in the political and

economic environments in Brazil, in emerging markets or internationally.

Adjusted EBITDA LTM² (R$ billion)

2.5

4.6 4.9 4.94.2

Dec/14 Dec/15 Mar/16 Jun/16 Sep/16

1.5

3.5 3.7 3.83.1

Dec/14 Dec/15 Mar/16 Jun/16 Sep/16

Operating Cash Generation¹ LTM² (R$ billion)

¹ Adjusted EBITDA – Sustaining Capex² Last twelve months

Return on Invested Capital (ROIC)

I N D I C A T O R U S E D T O

M A N A G E

S U Z A N OW H I C H M A I N D R I V E R I S

Operating Cash Generation

External Factors

FX Pulp Price

Lower

pulp sales volume

Delay in Shipment

Volumes booked in 4Q16

Lower Pulp Production

Scheduled maintenance downtimes

(Mucuri and Suzano)

Slower Production Pace (Imperatriz)

_ Inadequate return (pulp price)

_ Operational issue

3 Q 1 6 R E S U L T S

3 Q 1 6 R E S U L T S

Announcement of list price

increase in China to

US$530/ton (Oct/2016)

Healthy demand

PULP

4% price increase in Latin America (ex Brazil) effective as of October 2016

Braziliandemand weakening

PAPER

Positive results

in paper segment

in the domestic

market

Market share

gain in domestic

market, with flat

prices

Remains downward trend

CASH COST

(Inflation +8.5%)

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

-4.7%

668

706

654636 637

3Q15 4Q15 1Q16 2Q16 3Q16

6

SupplyDiscipline

Capital Discipline

Cost Discipline

R E S I L I E N T

B A L A N C E S H E E T A N D R E S U L T S

Financial Discipline

ADDITIONAL PULP SUPPLY

THREATENS INDUSTRY'S RETURNS

Product Portfolio

P O T E N T I A L PRODUCTION ADJUSTMENT

in 2017 based on market conditions

P O S T P O N E M E N T O F P R O J E C T 5 . 1 in Mucuri to 2018 Return from capacity expansion affected by market conditions

SUZANO IS MANAGED BASED ON RETURN ON

INVESTED CAPITAL (ROIC), NOT EBITDA

Supply Discipline

EFFICIENCY GAINS

ALLOW FOR THE EVOLUTION OF

COSTS BELOW

INFLATION

177 178

9M15 9M16

+0.1%

SG&A / Sales

Volume(R$/ton)

INFLATION: +8.5%

COGS / Sales

Volume

1,330 1,399

9M15 9M16

+5.2%

INFLATION: +8.5%

(R$/ton)

Cost Discipline

100% of supply

guaranteed with own

wood + supported

producers

Reduction in Forest

CAPEX over coming years

Potential demobilization of

forests located further from

the mill

Shorter average distance and

higher supply from own forests

REDUCTION IN STRUCTURAL COST

ADVANTAGES

W O O D S U P P L Y I N I M P E R A T R I Z M I L L

Acquisition of Land and Forests: US$ 245 million

Average Distance: 176 km

75 k ha of Total Area

40 k ha of Planted Area

L A S T M I L E S T O N E T O R E A C H T H E O P T I M A L S T R U C T U R A L C O S T B Y 2 0 2 1 / 2 0 2 2

BRL 475/ton

Cost Discipline

¹ Values in BRL in 2016.

Region with high productivity (Mean Annual Increment - MAI)

¹

CAPEX FLEXIBILITY

Adjacent Businesses 0.2

0.3Project 5.1

Sustaining 1.1

Others 0.1

Subtotal 1.7

Acquisition of Land and Forests 0.8

Total 2.5

R$ billion

R$ 0.9 bi

R$ 2.4 bi

2016 revised Capex

R$ 2.1 bi R$ 1.9 bi

R$ 1.14 bi

2017 estimated Capex

> >

>

Capital Discipline

Project 5.1 revised Capex

Financial Discipline

B A L A N C E S H E E T

R O B U S T

prepares Suzano for the future

Dollarization of 100% of

Net Debt

Higher Liquidity

(R$4 billion in cash) with

low financing cost

(4.6% p.a.)

Lengthening average

debt term to 3.5 years

(Sep/2016)

Dividends based on

cash generation

Nominal reduction in

Net Debt

Leverage¹ affected by

lower EBITDA

(2.1 times to 2.4 times)

¹ Net Debt/Adjusted EBITDA

L O W E R V O L A T I L I T YOF PAPE R SE G ME NT SUPPORTS

MORE RES IL IENCE OF CASH

GENERA TION

Products Portfolio1Q

12

2Q

12

3Q

12

4Q

12

1Q

13

2Q

13

3Q

13

4Q

13

1Q

14

2Q

14

3Q

14

4Q

14

1Q

15

2Q

15

3Q

15

4Q

15

1Q

16

2Q

16

3Q

16

Suzano’s Average Net Price (R$/ton)

Pulp Paper

CASH FLOW YIELD IS THE BEST INDICATOR TO COMPARE VALUE CREATION FOR SHAREHOLDERS ...

¹ Operating Cash Generation LTM/EV ² Data from 09/30/2016

¹

2

And Suzano has been posting the best number in the industry:

14.3%

BETTEREVERYDAY

STRONG AND KIND

www.suzano.com.br/ir

ri@suzano.com.br