corporate presentation (march)
TRANSCRIPT
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Corporate PresentationMarch 2016
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Disclaimer
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.
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The Company
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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
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A Winning Player
Port Terminal Pulp Unit
Três Lagoas
Santos
AracruzPortocel
Caravelas
BelmonteVeracel
Jacareí
Superior Asset Combination Main Figures – 2015
Pulp capacity million tons 5.300
Net revenues US$ billion 3.021
Total Forest Base(1) thousand hectares 969
Planted area(1) thousand hectares 568
Net Debt US$ billion 2.821
Net Debt/EBITDA (in Dollars)(2) X 1.78
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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Fibria’s Units Industrial Capacity
* Veracel is a joint operation between Fibria (50%) and Stora Enso (50%) and the total capacity is 1,120 thousand ton/year
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Fibria’s Strategy
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Leadership Position
(1) Fiber Consumption, Recycled Fiber and Pulp: RISI | Market Pulp, Hardwood and Eucalyptus: PPPC Global 100 Report December 2015(2) Hawkins Wright – Outlook for Market Pulp, December 2015
Market Pulp Capacity Ranking 2015(2) (000t)
5,300
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)
0 2000 4000 6000
Canfor
Cenibra
Resolute Forest
Sodra
Domtar
Mercer
Eldorado
Weyerhaeuser
IP (excl. Ilim)
Ilim
Metsa Group
Georgia Pacific
Stora Enso
UPM-Kymmene
CMPC
Suzano
APRIL
APP
Arauco
Fibria
Bleached Softwood Kraft Pulp
Bleached Hardwood Kraft Pulp
Unbleached Kraft Pulp
Mechanical Pulp
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Fibria’s Commercial Strategy
Source: Fibria – 4Q15
• 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
Net revenue by region
Fibria ‘s Offices
N.America
25%
L.America
8%
Europe
43%
Asia
24%
Fibria’s Pulp End Use
Tissue50%
Printing & Writing
35%
Speciatilies15%
Forest
OutboundLogistics
Pulp mill
PortClient
Low forest to mill average distance
Easy access to the most efficienttransportation 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
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Pulp and Paper Market
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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 – 2006Developed 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 – 2016Developed Markets: - 4.0%Emerging Markets : + 4.1%
CAGR 1996 – 2006Developed Markets: + 2.4%Emerging Markets : + 6.9%
CAGR 2007 – 2016Developed Markets: + 1.4%Emerging Markets : + 6.7%
26,877
Source: RISI
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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
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98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
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20
10
20
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20
12
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13
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20
15
20
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20
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20
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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% 35%
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%
Gross capacity addition should not be counted as the only factorinfluencing pulp price volatility….(1)
List Price bottoming at US$650/t in 2011 and US$724/t in 2014
Cap
acit
y (0
00
to
n)
BH
KP
pri
ces
-C
IF E
uro
pe
(U
S$/t
on
)
(1) Source: Hawkins Wright , Poyry and Fibria Analysis. Pulp price estimates according to Hawkins Wright (Dec/15), Brian McClay (Dec./15) and RISI (Jan/16)(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
FrayBentos
KerinciPL3
Três Lagoas
Rizhao
APP Guangxi
ChenmingZhanjiang
EldoradoMontes del Plata
Maranhão
Guaíba II
APP South Sumatra(2)
Klabin
OjiNantong
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
-315
-580
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016-2017 E (1)
(1) As of January 2016 | 2016: -40kt Old Town (USA), -90kt Woodland (USA), -55kt Verso Wickliffe (USA), -120 April Kerinci (Indonesia) | 2017: -275kt Arauco Valdivia (Chile)
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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
76
5
1
0
5
10
15
20
25
30
N.America
WestEurope
Japan Oceania EastEurope
LatAm China Africa
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Pulp Projects Backlog
Main Projects
Project Country Capacity Timing Status
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
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Financial Highlights
4Q15 Results
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EBITDA (R$ million) and EBITDA Margin (%) – FX Sensitivity
906 1,007 1,1571,551 1,623
4Q14 1Q15 2Q15 3Q15 4Q15
EBITDA (R$ million)
EBITDA Margin
Average FX (BRL/USD)
Average pulp price - FOEX Europe (USD/t)
45%50% 50%
56% 54%734 749
779803 8032.54
2.87 3.073.54
3.84
Pulp Production and Sales (000 t) Pulp Net Revenues (R$ million)
1,982
2,761 2,962
4Q14 3Q15 4Q15
102% 102% 101%
1,381
1,275 1,297
1,410
1,298 1,308
4Q14 3Q15 4Q15Production Sales
Sales vs. production
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Indebtedness
Debt (US$ million) x Leverage (US$) Interest (US$ million) x Cost of Debt (US$)
Free Cash Flow Increase
Interest Reduction
Cost of Debt Reduction
These dynamics creates a virtuous
cycle
(*) Considering the portion of debt in reais fully adjusted by the market swap curves of September. 30, 2015.
8.6
3.2
6.3
2.8
2009 2010 2011 2012 2013 2014 2015
Gross Debt Net Debt
7.29
4.11 4.253.32
2.60 2.41
1.78
473414 408
350
268200
144
2009 2010 2011 2012 2013 2014 2015
6.35.9
5.55.2
4.6
3.4 3.3(1)
Debt Profile
Debt Amortization Schedule (US$ million)
Cost of Debt – Foreign Currency (% p.a.) Debt by Currency
3.7 % 3.8%
Dec/14 Dec/15
10%
90%
Local Currency
Foreign Currency
655
498
275274
477
812
299
485
25 11
606
Liquidity 2016 2017 2018 2019 2020 2021 2022 2023 2024
Pre-payment BNDES ECN ACC/ACE Voto IV Bonds ARC and Others Total
Cash on hand
Revolver
1,153
22
5,337
357
( 3,033 )
(830)(338)
518( 1,892 )595
AdjustedEBITDA
FX Debt MtMHedge
Net Interest Deprec., amortiz.and
depletion
Taxes Others Net Income
Non-recurringeffects
(1) Includes other exchange rate/monetary variations, other financial income/expenses and other operating income/expenses.
∆∆
Net Results (R$ million) – 2015
22
(1)
Dividend proposal of R$300 million, representing 87% of net income.
