corporate presentation (june)
TRANSCRIPT
Color Scheme
77 141 72
255 140 0
120 120 120
153 204 0
178 178 178
54 100 62
255 113 33
218 219 220
1
Corporate Presentation June 2015
Color Scheme
77 141 72
255 140 0
120 120 120
153 204 0
178 178 178
54 100 62
255 113 33
218 219 220
2
Disclaimer
The information contained in this presentation may include statements which constitute 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.
Color Scheme
77 141 72
255 140 0
120 120 120
153 204 0
178 178 178
54 100 62
255 113 33
218 219 220
3
The Company
Color Scheme
77 141 72
255 140 0
120 120 120
153 204 0
178 178 178
54 100 62
255 113 33
218 219 220
4
Shareholder Structure
(1) Controlling group (2) Free Float 40.14% + Treasury 0.06%
Votorantim Industrial S.A.
(1) 29.42%
BNDES Participações (1)
30.38%
Free Float (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% independent
members
Role of CEO and
chairman is split
Personnel and Remuneration
Committee
Statutory Audit
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:
30%
independent
members
100%
independent
members
50% independent members
45% independent members
-
Color Scheme
77 141 72
255 140 0
120 120 120
153 204 0
178 178 178
54 100 62
255 113 33
218 219 220
5
A Winning Player
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 excluding the forest base linked to the sale of forest assets in Southern Bahia State and Losango. (2) For covenants purposes, the Net Debt/EBITDA ratio is calculated in Dollars.
Port Terminal Pulp Unit
Três Lagoas
Santos
Aracruz Portocel
Caravelas
Belmonte Veracel
Jacareí
Superior Asset Combination Main Figures – 1Q15 LTM
Color Scheme
77 141 72
255 140 0
120 120 120
153 204 0
178 178 178
54 100 62
255 113 33
218 219 220
6
Fibria’s Units Industrial Capacity
Três Lagoas – Mato Grosso do Sul – 1,300 thousand t/year
Jacareí – São Paulo – 1,100 thousand t/year
Aracruz – Espírito Santo – 2,340 thousand t/year Veracel – Bahia – 560 thousand t/year *
* Veracel is a joint venture between Fibria (50%) and Stora Enso (50%) and the total capacity is 1,120 thousand ton/year
Color Scheme
77 141 72
255 140 0
120 120 120
153 204 0
178 178 178
54 100 62
255 113 33
218 219 220
7
Fibria’s Strategy
Color Scheme
77 141 72
255 140 0
120 120 120
153 204 0
178 178 178
54 100 62
255 113 33
218 219 220
8
Leadership Position
(1) Fiber Consumption, Recycled Fiber and Pulp: RISI | Market Pulp, Hardwood and Eucalyptus: PPPC Global 100 Report December 2014 (2) Hawkins Wright – Outlook for Market Pulp, December 2014
Market Pulp Capacity Ranking 2014(2) (000t)
5,300
Recycled Fiber 238 million t
46% 54%
59%
18% 82%
59% 41%
41%
33% 67%
26% 74%
Fiber Consumption 406 million t
Pulp 168 million t
Chemical 138 million t
Mechanical 30 million t
Integrated Mills 82 million t
Market Pulp 56 million t
Hardwood 30 million t
Other Eucalyptus Pulp producers:
15 million t
Softwood/Other 26 million t
Acacia/Other 10 million t
Eucalyptus 20 million t
Industry Outlook(1)
0 2000 4000 6000
ENCE
Canfor
Resolute Forest
Sodra
IP
Domtar
Mercer
Eldorado
Ilim
Weyerhaeuser
Stora Enso
Metsa Group
Paper Excellence
Georgia Pacific
UPM-Kymmene
CMPC
Suzano
Arauco
APRIL
Fibria
Bleached Softwood Kraft Pulp (BSKP)
Bleached Hardwood Kraft Pulp (BHKP)
Unbleached Kraft Pulp (UKP)
Mechanical Pulp (MP)
Color Scheme
77 141 72
255 140 0
120 120 120
153 204 0
178 178 178
54 100 62
255 113 33
218 219 220
9
Fibria’s Commercial Strategy
Source: Fibria – 1Q15 LTM
• Differentiation: Customized pulp products to specific paper grades
• Sole supplier to key customers
• Long term contracts
• Competitive logistics set up
Miami
Lustenau
Hong Kong
São Paulo
Fibria’s Sales Distribution
Fibria ‘s Offices
N.America
23%
L.America
10%
Europe
42%
Asia
25%
Fibria’s Pulp End Use
Tissue 51%
Printing & Writing
31%
Speciatilies 18%
Forest
Outbound Logistics
Pulp mill
Port Client
Low forest to mill average distance
Easy access to the most efficient transportation network:
rail, barging and road
Portocel: specialized port for the pulp and paper industry
Integrated logistics solutions
Efficient Logistics Setup
Sea Freight
Door to Door Operations
10
Color Scheme
77 141 72
255 140 0
120 120 120
153 204 0
178 178 178
54 100 62
255 113 33
218 219 220
11
Pulp and Paper Market
Color Scheme
77 141 72
255 140 0
120 120 120
153 204 0
178 178 178
54 100 62
255 113 33
218 219 220
12
Paper Consumption
(1) Source: RISI
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Developed Markets Emerging Markets
CAGR 1996 – 2006 Developed Markets: + 1.7% Emerging Markets : + 6.0%
85,291
117,611
15,548
37,474
P&W Consumption (000 tons)(1)
Tissue Consumption (000 tons)(1)
114,507
CAGR 2007 – 2016 Developed Markets: - 4.0% Emerging Markets : + 4.1%
CAGR 1996 – 2006 Developed Markets: + 2.4% Emerging Markets : + 6.9%
CAGR 2007 – 2016 Developed Markets: + 1.4% Emerging Markets : + 6.7%
26,877
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Developed Markets Emerging Markets
Color Scheme
77 141 72
255 140 0
120 120 120
153 204 0
178 178 178
54 100 62
255 113 33
218 219 220
13
Source: PPPC
Global Market Pulp Demand
Hardwood demand will continue to increase at faster pace than Softwood
Hardwood (BHKP) vs. Softwood (BSKP) (000 ton) Demand growth rate
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 33.6 52% 35%
Eucalyptus 6.0 15.9 23.9 165% 50%
Softwood 19.0 21.4 24.8 13% 16%
Market Pulp 35.3 46.2 58.5
Gross capacity addition should not be counted as the only factor influencing pulp price volatility….(1)
14
Cap
acit
y (0
00
to
n)
BH
KP
pri
ces
- C
IF E
uro
pe
(US$
/to
n)
List Price bottoming at US$650/t in 2011 and US$724/t in 2014
(1) Source: Hawkins Wright , Poyry and Fibria Analysis. Pulp price estimates according to Hawkins Wright (Apr/15), Brian McClay (May/15) and RISI (Dec/14) (2) Partially integrated production
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
1,6
1,8
2,0
0
100
200
300
400
500
600
700
800
900
1.000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Valdivia
APP Hainan
Veracel Nueva Aldea
Santa Fé
Mucuri
Fray Bentos
Kerinci PL3
Três Lagoas
Rizhao
APP Guangxi
Chenming Zhanjiang
Eldorado Montes del Plata
Maranhão
Guaíba II
APP South Sumatra(2)
Klabin
Oji Nantong
Horizonte II
Source: PPPC and Fibria
Closures of Hardwood Capacity Worldwide (000 ton)
Capacity closures DO happen
-910
-85
-1,260
-1,180
-540 -500
-105
-1,085
-445
-750
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015-2017 E(1)
(1) As of April 2015
Total Cash Cost of BHKP delivered to Europe (US$/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
453 419
351 312
286 329
207 199
70 87
105
44 64
27
72 55
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 = 28,990 13,930 5,300
Color Scheme
77 141 72
255 140 0
120 120 120
153 204 0
178 178 178
54 100 62
255 113 33
218 219 220
17
Tissue Market
(1) Source: RISI
Kg/capita/year
Per Capita Consumption of Tissue by Region, 2013(1)
Growth Potential
0
5
10
15
20
25
30
35
1991 1996 2001 2006 2009 2010 2011 2012 2013
N.America W.Europe E.Europe L.America Middle East
Japan China Asia FE Oceania Africa
LTM Growth of +4.2%
Million tons
World Tissue Consumption, 1991-2013(1)
24
15 15
12
7 6
5
1
0
5
10
15
20
25
30
N.America
WestEurope
Japan Oceania EastEurope
LatAm China Africa
Color Scheme
77 141 72
255 140 0
120 120 120
153 204 0
178 178 178
54 100 62
255 113 33
218 219 220
18
Pulp Projects Backlog
Main Projects
Project Country Capacity Timing Status
CMPC Guaíba II Brazil 1.3 Mt 2Q2015 Confirmed
Klabin Paraná Brazil 1.5 Mt* 2Q2016 Confirmed
APP South Sumatra Indonesia 1.5 Mt – 2.0 Mt 4Q2016 Confirmed
Fibria Três Lagoas II Brazil 1.75 Mt 4Q2017 Confirmed
• Minimum required return for new projects
• Closures due to increasing costs worldwide, reduction of maintenance capex (higher technical age of recovery boilers) and exchange rates
• Fiber substitution: Softwood x Hardwood and Recycled x Virgin Fiber
Main Questions About Capacity
Even though there is an extensive pulp projects backlog, there are important question marks regarding new projects
* 1.1 million tonnes of hardwood and 400 thousand tonnes of softwood
Color Scheme
77 141 72
255 140 0
120 120 120
153 204 0
178 178 178
54 100 62
255 113 33
218 219 220
19
Financial Highlights
1Q15 Results
Cash Production Cost (R$/t)
Pulp Production and Sales (‘000 t) Net Revenue (R$ million)
EBITDA (R$ million) and EBITDA Margin (%)
1,642
2,001 1,997
1Q14 4Q14 1Q15
524 472
548 549
472
572
1Q14 4Q14 1Q15
Cash cost ex-scheduled downtimes Cash cost
679
906 1007
1Q14 4Q14 1Q15
42% 45% 50%
1,277
1,381
1,291
1,188
1,410
1,229
1Q14 4Q14 1Q15
Production Sales
Indebtedness
21
Debt (US$ million) x Leverage (US$) Interest (US$ million) x Cost of Debt (US$)
Free Cash Flow Increase
Interest Reduction
Cost of Debt Reduction
This dynamics creates a virtuous
cycle
8.6
2.9
6.3
2.8
2009 2010 2011 2012 2013 2014 Mar/15
Gross Debt Net Debt
7.5
4.1 4.2 3.3
2.6 2.7 2.3 473 414 408
350
268 200 178
2009 2010 2011 2012 2013 2014 1Q15LTM
6.3 5.9 5.5
5.2 4.6 3.4 3.5
(*) Considering the portion of debt in reais fully adjusted by the market swap curves of Mar. 31, 2015.
22
Debt Amortization Schedule at
Mar/2015
(US$ Million)
Debt Profile
Average Term: 54 months
Average Cost: 3.8% p.y.
Cost of Debt Foreign Currency (% p.a.)
Debt by Currency
6%
94%
Local Currency
Foreign Currency
4.1%
3.8
Mar/14 Mar/15
113
545
657
241 205
339
438
623
363
84 19 3
600
Liquidity 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Pre-payment BNDES ECN ACC/ACE Voto IV Bond
(cash)
(revolver)
Net Results (R$ million) – 1Q15
23
1,007
(1,685) (566)
(123) (44) (85)
(448) 643
179 (22)
AdjustedEBITDA
FX Debt /MtM Debt
Hedge
MtMOperational
Hedge
Swap/ZCCsettlements
NetInterest
Deprec.,amortiz. and
depletion
Income Taxes
Other FX andmonetaryvariations
Others Net Income(Loss)
FX Debt ∆
deffered
∆
∆
MtM hedge
∆
swap ZCC
(1)
current
(1) Includes non-recurring expenses/non-cash and other financial income/expenses.
