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Morgan Stanley Global Emerging Markets Conference May 2014

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Page 1: Morgan Stanley - Global Emerging Markets Conference

Morgan Stanley – Global Emerging Markets Conference May 2014

Page 2: Morgan Stanley - Global Emerging Markets Conference

2

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.

Disclaimer

Page 3: Morgan Stanley - Global Emerging Markets Conference

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Company Overview 1 Pulp and Paper Market 2 Financial and Operational Highlights 3

Agenda

Final Remarks 4

Page 4: Morgan Stanley - Global Emerging Markets Conference

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Company Overview

Page 5: Morgan Stanley - Global Emerging Markets Conference

5

A Winning Player

Port Terminal Pulp Unit

Três Lagoas

Santos

Aracruz Portocel

Caravelas

Belmonte Veracel

Jacareí

Superior Asset Combination Main Figures – 1Q14 LTM

Pulp capacity million tons 5.300

Net revenues R$ billion 7.1

Total Forest Base (1) thousand hectares 962

Planted area(1) thousand hectares 558

Net Debt R$ billion 7.0

Net Debt/EBITDA (in Dollars)(2) X 2.4

Net Debt/EBITDA (in Reais) X 2.4

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.

Page 6: Morgan Stanley - Global Emerging Markets Conference

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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

Page 7: Morgan Stanley - Global Emerging Markets Conference

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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

Sales Mix by Region - Fibria

Europe 39%

N. A. 28%

Asia 25%

Others 8%

LTM 1Q14

Tissue 53% P&W

29%

Specialty 18%

LTM 1Q14

Highlights

30% 20%

29% 29% 24% 18% 26% 26% 30%

22% 28% 31% 30% 19%

37% 46%

46% 41%

35% 44% 43% 41% 36%

42% 43% 35% 36%

46%

22% 25% 14% 20%

31% 28% 20% 23% 25% 26% 21% 26% 26% 26%

11% 9% 11% 10% 10% 10% 11% 10% 9% 10% 8% 8% 8% 9%

4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14

North America Europe Asia Others

Fibria’s Commercial Strategy

Page 8: Morgan Stanley - Global Emerging Markets Conference

8

(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 with ADRs

• Indebtedness and liquidity

• Market risk management

• Risk management

• Corporate governance

• Information disclosure

• Stock trading

Fiscal Council

Board of Directors

20% independent

members

Role of CEO and

chairman is split

Innovation Committee

Statutory Audit

Committee

Finance Committee

Sustainability Committee

Personnel and Remuneration

Committee

General Meeting

Listed on Novo Mercado, highest CG level at BM&FBovespa: Policies approved by the Board of Directors:

Shareholder Structure and Corporate Governance

Page 9: Morgan Stanley - Global Emerging Markets Conference

9

Fibria was elected as 1st place in the

pulp & paper sector in the corporate

governance and future's vision categories

Fibria is one of the 5 Brazilian companies

nominees to the Best Corporate

Governance

Award from London.

Company of the year,

among all industries,

according to Valor

Econômico.

Valor 1000

XVII ANEFAC-FIPECAFI - SERASA

EXPERIAN Prize

Fibria is among the most

transparent public companies

in Brazil, recognized for the

quality of its 2012 financial

statements.

Fibria was ranked for the forth

consecutive year (2010, 2011, 2012

and 2013).

In 2013 Fibria was ranked in four

categories: CEO, CFO, IR Team and IR

Professional

2013 Institutional Investor Latam Ranking -

P&P Sector

Fibria was selected as one of the 10 best

companies in

transparency.

The only one in

the pulp & paper

sector.

CDP Brasil 100 – Climate Change 2013

Report Época Negócios 360º

International Recognition by Corporate

Governance Report

Fibria was elected as 2nd place.

The prize highlights the

business profitability,

share profitability,

liquidity, corporate

governance and sustainability.

The Best Companies to the Shareholders

Prize of Capital Aberto Magazine

Fibria is the only Latin America company

selected by RobecoSAM (responsible for

DJSI) as one of the 10 worldwide leaders in

SRI magazine’s “The 10 Game Changers –

Changing the industry through

sustainability”.

RobecoSAM - Sustainability Investing

Magazine

Selected to Dow Jones World and

Emerging Markets Sustainability

Indices for 2013/14 as the industry

leader of Forestry Resources and

Paper sector.

DJSI World and DJSI Emerging Markets

Acknowledgments: Governance, Transparency, Profitability & Sustainability

Page 10: Morgan Stanley - Global Emerging Markets Conference

10

Pulp and Paper Market

Page 11: Morgan Stanley - Global Emerging Markets Conference

11

Today, according to public information, there will be a 11% increase of the pulp market capacity between 2014 and 2016

SOFTWOOD(1)

25.5 MT

HARDWOOD(1)

31.1 MT

MARKET PULP(1)

56.6 MT + =

2014-2016(3):

• New capacities: 6.0 mt • Announced Closures: (0.13) mt

Net: 5.9 mt

2014-2016(2): • New capacities: 0.7 mt

• Announced Closures: (0.35) mt

Net: 0.35 mt

2014-2016:

• New capacities: 6.7 mt • Announced Closures: (0.5) mt

Net: 6.2 mt

(1) Source: PPPC Special Research Note May 2014 – does not include Sulphite and UKP (2) Projects included: Paper Excellence (70kt); UPM Kymi (170kt); Klabin (200kt); Sodra Värö (275kt)| Closures: Birla AV Terrace Bay (350kt) (3) Projects included: Maranhão (1.5mt); Montes del Plata (1.3 mt); Oji Nantong (700kt); Eldorado (200kt); CMPC Guaíba II (1.3 mt); Klabin Ortigueira (1.0mt) | Closures: April Rizhao

(130kt)

Page 12: Morgan Stanley - Global Emerging Markets Conference

12

844kt

196kt

-37kt

674kt

Total North America Western Europe China

+6% 2013 vs. 2012

+12%

+23%

-1% 400

500

600

700

800

900

1000

1100

0

50

100

150

200

250

jul-

08

ou

t-0

8

jan

-09

abr-

09

jul-

09

ou

t-0

9

jan

-10

abr-

10

jul-

10

ou

t-1

0

jan

-11

abr-

11

jul-

11

ou

t-1

1

jan

-12

abr-

12

jul-

12

ou

t-1

2

jan

-13

abr-

13

jul-

13

ou

t-1

3

jan

-14

abr-

14

Spread Avg. Spread BHKP NBSK

Global Pulp Market Demand

Demand growth rate Hardwood (BHKP) vs. Softwood (BSKP) (000 ton)

Hardwood demand will continue to increase at a faster pace than Softwood

Source: PPPC Source: PPPC

(1) Source: PPPC World 20 – December/2013

Shipments of Eucalyptus Pulp (1) NBSK vs. BHKP - Prices(1)

(1) Source: FOEX

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

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

Hardwood Softwood

2013 - 2018 CAGR: Hardwood: +2.8% Softwood: +0.7%

000 ton 1998 2008 2018

Growth

1998-

2008

Growth

2008-

2018

Hardwood 15.0 24.5 32.8 63% 34%

Eucalyptus 6.0 14.2 23.2 137% 63%

Softwood 17.6 21.6 24.8 23% 15%

Market Pulp 32.6 46.1 57.1

Page 13: Morgan Stanley - Global Emerging Markets Conference

13

Supply structural changes puts pressure on the industry

MARKET PULP CAPACITY RANKING 2013 (000T) MAIN PROJECTS

Project Country Capacity Timing Fiber Status

Arauco / Stora Uruguay 1.3Mt 1Q2014 BEKP Confirmed

CMPC Guaíba II Brazil 1.3 Mt 2Q2015 BEKP Confirmed

Klabin Paraná Brazil 1.5 Mt 2Q2016 BEKP/

BSKP/Fluff Confirmed

APP South Sumatra Indonesia 2.0 Mt 4Q2016 BHKP Confirmed

Fibria Três Lagoas II Brazil 1.75 Mt - BEKP Unconfirmed

COST CURVE EVOLUTION

USD

/Ad

t, 2

01

3 c

ost

leve

l

Cumulative Capacity Million t/a

Cost position of marginal

producer

Source: Hawkins Wright , Poyry and Fibria Analysis

0 2000 4000 6000

Canfor

ENCE

Eldorado

Resolute Forest

Domtar

Mercer

Ilim

IP

Weyerhaeuser

Sodra

Stora Enso

Suzano

Metsa Group

Paper Excellence

UPM-Kymmene

Georgia Pacific

CMPC

Arauco

APRIL

Fibria

Bleached Softwood Kraft Pulp (BSKP)

Bleached Hardwood Kraft Pulp (BHKP)

Unbleached Kraft Pulp (UKP)

Mechanical

Page 14: Morgan Stanley - Global Emerging Markets Conference

14

Source: Hawkins Wright , Poyry and Fibria Analysis

Gross capacity addition should not be counted as the only factor influencing pulp price volatility

BH

KP

pri

ces

- ci

f Eu

rop

e (U

S$/t

on

)

Gre

enfi

eld

cap

acit

y (0

00

to

n)

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

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

Page 15: Morgan Stanley - Global Emerging Markets Conference

15

Capacity closures DO happen…

-910

-85

-1,260

-1,180

-540 -500

-105

-1,085

-130

-1400

-1200

-1000

-800

-600

-400

-200

0

2006 2007 2008 2009 2010 2011 2012 2013 2014-2015

Source: PPPC and Fibria

Closures of Hardwood Capacity Worldwide 000 ton

Page 16: Morgan Stanley - Global Emerging Markets Conference

16

Technical Age and Scale in the Market Pulp Industry Further closures are expected due to lack of adequate investments in the industry…

Hardwood (BHKP) Market Pulp Softwood (BSKP) Market Pulp

0

500

1,000

1,500

2,000

2,500

3,000

0 5 10 15 20 25 30

PM Capacity, 1000 t/a

Technical Age, years

STRONG

2013/IQ

Weighted average

technical age 14.2 years

Weighted average

capacity 1184 000 t/a

Aracruz

Três Lagoas

Veracel

Jacareí

0

500

1,000

1,500

2,000

2,500

3,000

0 5 10 15 20 25 30

PM Capacity, 1000 t/a

Technical Age, years

WEAK

STRONG Weighted average

technical age 21.2 years

Weighted average

capacity 503 000 t/a

2013/IQ

North American Pulp Mills Other Pulp Mills Closures Grade Switch On & Off

WEAK

Page 17: Morgan Stanley - Global Emerging Markets Conference

17

… and when other expenses are plugged, we see no one but Fibria is generating positive free cash flow in the industry

Total Cash Cost of BHKP

delivered to Europe

(US$/t)

528 493 502 453 479 464 388 406 426

316 304 306 286 261 229

48 40

71 70 47 42

112 36 42

50 41 45 56 67 68

57

113

44

Cash Cost (US$/t) Delivery (US$/t)

Source: Hawkins Wright (Outlook for Market Pulp, March2014) | Fibria’s 1Q14 LTM considering a FX of R$/US$2.25.

519

SG&A Others

CAPEX

Interest

Working Capital = +11

Capacity (k tons): 660 595 1,775 585 565 355 1,005 2,410 1,960 1,095 12,750 = 31,930 330 3,680 4,165

FOEX

Net price

809

Page 18: Morgan Stanley - Global Emerging Markets Conference

18

China: Paper capacities expansion continues to go on

China corresponds to 2/3 of global tissue capacity expansion

Ktons 2013 2014E 2015E Total

P&W (woodfree) 385 150 576 1,111

Tissue 1,029 1,831 471 3,331

Cartonboard 2,128 1,650 180 3,958

Total 3,542 3,631 1,227 8,400

Page 19: Morgan Stanley - Global Emerging Markets Conference

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World Tissue Consumption, 1991-2013 (3)

Per Capita Consumption of Tissue by World Region (3) China's Share of Market Pulp (2)

24

15 15

12

7 6 5

1

0

5

10

15

20

25

30

N. America

West Europe

Japan Oceania East Europe

LatAm China Africa

9 11 13 16

26

17 21 20

23

7 9 10

12

22

16 20 19

21 10

10 12

14

21

17

22 23

23

0

2,000

4,000

6,000

8,000

10,000

12,000

2005 2006 2007 2008 2009 2010 2011 2012 2013

Eucaplyptus Hardwood Total

1,889

760 556

439

60 53 21

1,922

805

516 525

57 10 9 0

500

1,000

1,500

2,000

2,500

BHKP Total

Latin America

Others* Indonesia USA Canada Western Europe

1Q2013

1Q2014

Latin America is the leading exporter of BHKP to China, accounting to approximately 42% of China's total imports in 1Q2014.

(Kg/capita/year)

(million t) (‘000s t) (kg/person/year)

Between 2005 and 2013, the Chinese market share of eucalyptus shipments increased by 14 p.p. (total market pulp: + p.p.)

* includes Russia, China, Thailand and New Zealand

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 Rate +4.2%

Benefiting From China’s Growth

China’s Hardwood Imports of BHKP by Country (1)

(1) PPPC – Pulp China (2) PPPC – W20. Coverage for chemical market pulp is 80% of world capacity (3) RISI

(In percentage)

Page 20: Morgan Stanley - Global Emerging Markets Conference

20

Internal Consumption and Urbanization

China’s private consumption vs. exports (CNY trillion and annual % change) (1)

Chinese Urbanization Driver of Long-Term Growth

(UN Population Projections, Millions)(2)

Sources: (1) the Economist. (2) RISI China Pulp Market Study.

Shift from exports to private consumption;

Positive effects on households income and rising standards of living.

Page 21: Morgan Stanley - Global Emerging Markets Conference

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Financial and Operational Highlights

Page 22: Morgan Stanley - Global Emerging Markets Conference

22

The maturity of synergies captured since Fibria’s creation improved its operating indicators…

+15%

4,600

5,054 5,184

5,299 5,271 5,272

2009* 2010* 2011 2012 2013 1Q14 LTM

PRODUCTION VOLUME (000 t) BEST PRACTICES AND OPERATING STABILITY

Historical Value Inflation Effect**

-21%

CASH COST (R$/ton)

Historical Value Inflation Effect**

-17%

SG&A (R$ million) STRUCTURE AND PROCESS SIMPLIFICATION

1,522

2,526

1,964 2,253

2,796 2,910

2009* 2010* 2011 2012 2013 1Q14 LTM

29%

40% 34% 36%

40% 41%

EBITDA (R$ million) - EBITDA MARGIN (%)

* Excludes Conpacel | ** IPCA index considered to calculate the inflation effect

432 448 471 473 505 515

656 624 596 549 545

2009* 2010* 2011 2012 2013 1Q14 LTM

593 593 605 584 648 659

900 826

766 678 699

2009* 2010* 2011 2012 2013 1Q14 LTM

Page 23: Morgan Stanley - Global Emerging Markets Conference

23

Net Debt (Million)

1,475

1,484

2,959

1,288

777 773

1,386 1,230

943 650

1,367

26 5

1,356

Liquidity 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Pre-payment BNDES NCE ACC/ACE/Other Voto IV Bond Pro Forma

(cash)

(revolving)

3.1 2.8 2.4

3.1 2.6 2.4

9,898 9,773 8,445

4,915 4,172 3,732

Mar/13 Dec/13 Mar/14

R$ US$

7,516 7,849 6,969

3,732 3,351 3,080

Mar/13 Dec/13 Mar/14

R$ US$

Net Debt/EBITDA (US$) Net Debt/EBITDA (R$)

- 24%

Debt Amortization Schedule (R$ million)

- 11%

Indebtedness

Gross Debt (Million)

Page 24: Morgan Stanley - Global Emerging Markets Conference

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Fibria delivered the most significant leverage reduction in the LTM

Net Debt/EBITDA (x)(1)

7.2

6.3

5.6

4.7

3.9 3.6

2.9

3.2

4.2 4.8

5.2

4.7 4.5

3.4

3.1

3.3 3

2.8 2.4

2.5

2.0

3.3 3.0

4.2

4.8

4.8

5.7

4.7 5.0 5.0 5.1 5.1 5.2

4.8

2.2

2.2 2.1 2.0

2.4

2.5

2.3 2.5

2.3 2.4 2.2

2.4 2.4 2.6

1.7

1.1

1.9 1.8 1.9

2.0 2.3 2.5

2.8 2.9 3.3

3.4

2.9 3.0 2.8

2.9

1.7

1.4 1.6 1.8

2.7

2.2

2.7

3.4 4.1

4.6 4.3

3.7 3.1

3.8

Sep/09 Dec/09 Mar/10 Jun/10 Sep/10 Dec/10 Mar/11 Jun/11 Sep/11 Dec/11 Mar/12 Jun/12 Sep/12 Dec/12 Mar/13 Jun/13 Sep/13 Dec/13 Mar/14

Fibria Arauco¹ CMPC Klabin Suzano

S&P BB+/Positive BBB-/Stable BBB-/Stable BBB-/Stable BB/Negative

Moody’s Ba1/Positive Baa3/Negative Baa3/Negative - Ba2/Stable

Fitch BBB-/Stable BBB/Stable BBB+/Stable BBB-/Stable BB-/Positive

(1) Fibria’s historical data in BRL.

Ratings

Page 25: Morgan Stanley - Global Emerging Markets Conference

25

Liquidity Events: delivered as promised

1,361

5,715

1,045

850

836

1,403

1,268

1,851

1,625

EQUITY OFFERING FOREST SALE 2012 (1) FCF 2012 LAND DEAL FCF 2013 TOTAL

4.8 5.2 4.7 4.5 3.4 3.1 3.3 3.0 2.8 2.4

Dec/11 Mar/12 Jun/12 Sep/12 Dec/12 Mar/13 Jun/13 Sep/13 Dec/13 Mar/14

Net Debt/EBITDA (x) R$

(1) Losango and forestry assets and land in the south of Bahia State

2012 Bond prepayment

2013 Bond prepayment

Available

Sources (R$ Million) Uses (R$ Million)

2014 Bond prepayment

REFIS

Page 26: Morgan Stanley - Global Emerging Markets Conference

26

Interest expense and cost on foreign currency debt

Fonte: Fibria e Bloomberg

143

126

133 137

123 125 123 122 126

120

134

120 117

109

94 93 87 85

4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14

6.3

6.8

6.0 6.0 5.9

6.3

5.8 5.5 5.5 5.5 5.4

5.2 5.2 5.2

4.7 4.5 4.6

4.1

4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14

Page 27: Morgan Stanley - Global Emerging Markets Conference

27

Fibria 2024 – New Bond Issuance

Principal: US$ 600 millon

Issuance Date: May/2014

Coupon: 5.25% a.a.

Bookbuilding: 11.5x

Spread over T10Y: 275.0 bps

Issuance

US$ 600 million

Highlights

- SEC registered

- IG document

- Increased Debt profiles

- Fibria 2021 Early redemption equals to 78% of the total

Fibria 2024

- For liability management purposes only

- Savings of US$ 5.5 MM in interest per year

Page 28: Morgan Stanley - Global Emerging Markets Conference

28

560

214 (258)

(99)

25

(6) (8)

Adjusted EBITDA Capex Net Interest Working Capital

IR/CS Other Free Cash Flow

Fibria delivers one of the highest EBITDA/t and FCF/t of the industry

(1) Does not include: the capital gain on assets sales, Bonds repurchases and the tax payment (REFIS) over profit earnings abroad

2,910

1,111

(1,340)

(516)

132 (30) (45)

Adjusted EBITDA Capex Net Interest Working Capital

IR/CS Other Free Cash Flow

Free cash flow generation(1) - 1Q14 LTM (R$ Million)

Free Cash Flow per ton - 1Q14 LTM (R$/ton)

Page 29: Morgan Stanley - Global Emerging Markets Conference

29

2.00 1.76 1.67

1.95 2.16

2.25

562

844 810 751 791

787

FX and Pulp Price explain 80% of Fibria’s EBITDA Margin

Average Price FOEX (US$/t)

Exchange Rate Average (R$/US$)

EBITDA Margin

EBITDA (R$ million)

29%

40%

34% 36% 40%

41%

1,522

2,526

1,964 2,253

2,796 2,910

2009 (1) 2010 (1) 2011 (1) 2012 2013 1Q14 LTM

(1) Excludes Conpacel

Page 30: Morgan Stanley - Global Emerging Markets Conference

30

Maintenance CAPEX (R$ Million)

1,416

1,078

1,287

1,520

2011 2012 2013 Land Deal:

Rural

Partnership

Non recurring

wood

purchase

Inflation FX Rate Modernization Others 2014E

Approx.

18% increase

Page 31: Morgan Stanley - Global Emerging Markets Conference

Cash Production Cost saw an increase of 17% over the past 5 years

Cash Production Cost (1) (R$/ton)

432 448

471 473

505

2009 (2) 2010 (2) 2011 2012 2013

CAGR: + 4% 2014 Cash Production Cost:

• Wood costs will represent the main impact

• Non recurring increase mainly due to third party wood

• Operating excellence actions focused on keeping cash cost below inflation

• In 2015 the wood impact will be structurally eliminated

(1) Excludes Conpacel

Target to have the cash cost increase below inflation

31

Page 32: Morgan Stanley - Global Emerging Markets Conference

32

Final Remarks

Page 33: Morgan Stanley - Global Emerging Markets Conference

33

PULP

- Growth with discipline

- Best portfolio of projects

BIO-ENERGY

- Complementary to pulp

- Ensyn

INDUSTRY

CONSOLIDATION ?

OTHER OPPORTUNITIES

- Portocel

- Land and forest

Potential Growth

Prospects

Fibria is seeking value creation for its shareholders with capital discipline

Page 34: Morgan Stanley - Global Emerging Markets Conference

34

Key Highlights

Sound credit profile, with decreasing leverage ratios

Market leader with a highly profitable operation and cash cost below industry average

Highly experienced and qualified management team

Highly recognized and awarded by industry specialists

Page 35: Morgan Stanley - Global Emerging Markets Conference

35

Back up

Page 36: Morgan Stanley - Global Emerging Markets Conference

36

Hedge

Hedging Strategy

• Debt Hedge:

- Swap operations (currency and rate)

- Maturity aligned with original debt

- No margin call

• Operating Hedge:

- Net FX exposure protection in US$ in up to 18 months

- Current strategy: Zero Cost Collar

- No leverage

- No margin call

- 03/31/2014 data:

- Notional: US$ 932 million

- 41% of protected net exposure

- Maturity: up to 12 months

• All Fibria operations are registered at CETIP

Governance

• Hedging Policy approved by the Board of Directors and available at the Investor Relations website.

• Periodical follow up of the hedge portfolio by the Finance Committee

• Maximum % of exposed operational flow is defined according to the FX risk management policy.

• Governance, Risk and Compliance (GRC) Team:

- Report to CEO

- Responsible for monitoring policies compliance

- Independent from Treasury

ZeroCostCollar x NDF – Payoff

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Fibria’s tax structure

Tax benefits (R$)

Fiscal - annual adjustment

Benefit Amount Maturity

Goodwill

(Aracruz

acquisition)

Annual tax deduction:

~R$89 million (tax)

Remaining Balance Dec./13:

R$1.29 billion (base)

2018

Forestry Capex in

Mato Grosso do

Sul state

2014’s tax deduction related

to depletion: R$ 5,5 million

(tax)

Undefined

Tax loss carry forward and tax credits

Benefit Amount

Tax loss

carryforward

Balance up to Mar./14:

R$631 million (base)

Accumulated tax

credits

Balance Mar./2014:

-PIS/COFINS: R$533 million

- withholding tax (IR and CSLL):

R$231 million

Actual tax payment (cash basis)

2009 2010 2011 2012 2013

R$7 million R$16 million R$4 million R$15 million R$31 million

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Due to productivity gains in its forests, Fibria had the opportunity to explore this new ownership model

MAI* Pulp: (adt/ha/year)

10.6 10.9

12.1

15.0 15.0 15.0 15.0 15.0

2010 2015 2020 2025 2030 2035 2040 2045

FIBRIA’S GAINS IN IMACEL DUE TO INVESTMENTS IN BIOTECHNOLOGY (TONS OF PULP/HA/YEAR)

2012 field trials = 11.9

Conservative assumption

*MAI: Mean annual increment

Actions: • Genetic improvement • Excellence in forestry management • Superior industrial efficiency

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Leadership position

(1) Fiber Consumption, Recycled Fiber and Pulp: RISI | Market Pulp, Hardwood and Eucalyptus: PPPC Special Research Note - May 2014

Recycled Fiber 234 million t

49% 51%

60%

18% 82%

58% 42%

40%

35% 65%

29% 71%

Fiber Consumption 403 million t

Pulp 169 million t

Chemical 139 million t

Mechanical 31 million t

Integrated Mills 84 million t

Market Pulp 56 million t

Hardwood 29 million t

Other Eucalyptus Pulp producers:

13 million t

Softwood/Other 27 million t

Acacia/Other 10 million t

Eucalyptus 19 million t

Industry Outlook(1)

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Global Paper Consumption

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

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

Source: RISI

Page 41: Morgan Stanley - Global Emerging Markets Conference

41

Cash Production Cost – 1Q14

507 466

549

1Q13 4Q13 1Q14

Cash Production Cost (R$/t)

463 466

524

1Q13 4Q13 1Q14

Cash Production Cost ex-downtimes

(R$/t)

1Q14 vs. 1Q13:

- Higher transportation costs

- Exchange rate

- Higher fixed costs

- Higher input consumption

- Third party wood (1Q13: 9% I 1Q13: 11%)

Management initiatives seeking to maintain the cash cost increase below the inflation.