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BofAML - 2016 CalGEMs Global Emerging Markets

June, 2016

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
companys 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.

1 Company Overview
2 Pulp and Paper Market
3 Financial and Operational Highlights
4 Expansion Project Horizonte 2
5 Dividends
Cost reduction initiatives and
6 industry statistics
Agenda

Company Overview
4

A Winning Player
Superior Asset Combination

Belmonte
Veracel
Caravelas
Portocel
Aracruz

Main Figures 1Q16 LTM

Pulp capacity

million tons

5.300

Net revenues

US$ billion

2.930

Total Forest Base(1)

thousand hectares

969

Planted area(1)

thousand hectares

568

US$ billion

2.897

1.86

Net Debt

Net Debt/EBITDA (in Dollars)(2)

Trs Lagoas
Jacare
Santos

Port Terminal

Pulp Unit

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; As of December 31, 2015.
(2) For covenants purposes, the Net Debt/EBITDA ratio is calculated in Dollars.

Fibrias 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

Fibrias Commercial Strategy


Sales Mix by End Use - Fibria
End Use - 1Q16

Region - 1Q16
N.
America
17%

Europe
46%

Highlights

Tissue

Printing &
Writing

48%

38%

Asia
25%
LatAm
12%

Specialties

14%

Net Revenues by Region - Fibria


10%

9%

10%

22% 25% 26%

26%

30% 22%

8%

9%

21%

25% 26% 26% 27% 24% 23% 26% 26% 25% 20%
25%

29%

8%

31% 31%

10%

9%

10% 10% 10%

9%

8%

9%

12%

19% 23% 27% 27% 17% 24% 25% 29% 17%

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)

47% 42% 42% 42% 46%


46% 42%
42% 37% 43% 43%
39% 40%
35% 36%

3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16

Europe

North America

Asia

Other

Pulp Supply Agreement: Puma Project


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 Paranagu (FOB Paranagu)
Sales destination: Globally, except for South America

Operational startup: Mar/2016


Agreement benefits:

Logistics and commercial


structure synergies;

Logistics and commercial


optimization and synergies;

Ensure sales volumes;

Support customers growth and


enhance customers needs;

Ensure pulp market access with


Klabin brand.

Potential development of new customers.

Mutual value creation, with better servicing for both Companies customers base
8

Pulp and Paper Market


9

The better than expected scenario has become a reality again in


2015
BHKP CAPACITY CHANGES
EXPECTED SCENARIO FOR 2015 IN DEC14
Suzano Maranho

750
265

Oji Nantong

Portucel Cacia

85

Sappi Cloquet
April Rizhao
Ence Huelva
Possible closures*
Net
BEKP demand growth**

500
200

Eldorado

30

Old Town (Expera)

265

CMPC Guaiba II

200

Eldorado

750

Montes del Plata


Oji Nantong

750

CMPC Guaiba II

400

Suzano Maranho

400

Montes del Plata

REALIZED SCENARIO IN 2015

Portucel Cacia

30

Old Town (Expera)

40
40

Ence Navia

115

115

Sappi Cloquet

-65

April Rizhao

-315

Ence Huelva

-400 to -800

Unexpected Downtimes
1,415 to 1,815

1,095

*Based on annual closures average (400,000 to 800,000 t/yr)


**Source: PPPC Outlook for Eucalyptus Market Pulp December 2014

-190
-315
-400

Net
BEKP demand growth**

Indonesia, China,
Uruguay and Brazil

1,450

1,232

**Source: PPPC Market Pulp World 20

10

and so has been the price scenario


BHKP Delivered to Europe (USD/t)
804

802
784

781

750

738

735
726

721
709

1Q15

2Q15

3Q15

Consultants average at the end previous year

4Q15

Annual 2015

Realized PIX/FOEX price

Consultants: Hawkins Wright, RISI and Brian McClay (published in the end 2014 for 2015 prices)

11

Better worldwide macroeconomics are the key drivers But the


special focus is on Europe
Real GDP % Annual Growth

7.7 7.7

7.3

6.9

6.3

3.5
3.4 3.3 3.4
3.1

0.9

2.4 2.4 2.4

2.2

1.5 1.7

1.5

-0,3
-0.8
World

Euro Area
2012

USA
2013

2014

2015

China

2016

Source: International Monetary Fund, World Economic Outlook Database, January 2016

12

But the special focus is on Europe


Hardwood and Eucalyptus Shipments (000 t and % annual growth)

400

6.0%
5.0%

3.8%
3.3%

200

0
-0.3%

-0.8%

-0.8%

-0.6%

-200
2012

2013

2014

BHKP

2015

BEKP

Source: PPPC World 20

13

So, what can we expect for 2016?


BHKP CAPACITY CHANGES
EXPECTED SCENARIO FOR 2016 IN NOV15

Altri Celbi

Woodland

Old Town (Expera)


-90

APRIL Kerinci

-120

Possible closures*

APP South Sumatra

-40

-55

-400 to -800

930

1,200

*Based on annual closures average (400,000 to 800,000 t/yr)


**Source: PPPC Outlook for Eucalyptus Market Pulp May 2015 (930kt) and
Fibrias estimates

-40
-90

Verso Wickliffe

-55

Possible closures*
385 to 785

180

Woodland

APRIL Kerinci

Net
BEKP demand growth**

30

Altri Celbi

30

Verso Wickliffe

660

Klabin

660

Klabin

800

CMPC Guaiba II

800

CMPC Guaiba II

Old Town (Expera)

FIBRIAS EXPECTED SCENARIO FOR 2016

-120
-200

Net

1,165

BEKP demand growth**

1,200

Positive Supply/Demand Balance!


14

Global Market BEKP Demand


Shipments of Eucalyptus Pulp
2M16 vs. 2M15(1)

3M16 vs. 3MQ15(2)

7%
6%
3%
216kt
128kt

285kt

6%
8%
40kt

Total

13%

10%
1%

26% 84kt
114kt
6%
64kt

North
America

-1%

1%

1%

4%

4%

100kt

26kt
-7kt 12kt 11kt
China
Others

Western
Europe
BHKP

7%

-7% 2%

Total

-57kt 7kt
North
America

BEKP

(1) Source: PPPC World 20 January/2015


(1) Source: PPPC Global 100 February/2016

(2)

1% 73kt

202kt
153kt

1% 0.2%

32kt

Western
Europe
BHKP
BEKP

-28kt 3kt
China

Others

Source: PPPC Global 100 March/2016

Paper Capacity increase in China


2014

2015

2016

FORECAST

REALIZED

PREVIOUS
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

15

Technical Age and Scale in the Pulp Industry


Further 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

PM Capacity, 1000 t/a


1000

STRONG

Aracruz

Weighted average
technical age 21 years

900

Weighted average
technical age 12.3 years

2000

PM Capacity, 1000 t/a


STRONG

800
700

1500
Veracel

Weighted average
capacity 1,350,000 t/a

600

Jacare
Trs Lagoas

500

1000

400
300

500

Weighted average
capacity 534,000 t/a

200
100

0
30

WEAK

25

20
15
10
Technical age, years

North American Pulp Mills

30

WEAK

25

20
15
10
Technical age, years

Other Pulp Mills

More than 6.6 million tons of capacity above 25 years and with annual capacity below 500,000 t/y.

16

Capacity closures DO happen

Closures of Hardwood Capacity Worldwide


(000 ton)
-85

-105
-315
-540

-445

-500

-580

-910

-1,085
-1,180
-1,260
2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016-2017 E (1)

Source: PPPC and Fibria


(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)

17

Even more competitive cash production cost w/ H2


BHKP (US$/t)
BHKP
capacity
(000 t)

1,130

2,075

1,095

2,290

3,420

4,915

15,275

Total: 30,200

BHKP (US$/t)
547
87

483
55

460

USA

428

China

475
100

375

Canada

372
25

347

Iberia

348

355

414
19
16

49

60

100

299

Indonesia

Cash Cost (US$/t)

295

Chile/Uruguay

275

58

40
51

217

183

Brazil

342
19
16
79

36
57

WK
Interest
Capex
Income tax
SG&A

131

Fibria 1Q16 LTM Estimated Fibria


w/ H2 - 2021

Delivery CIF Europe

Source: Hawkins Wright (Price Forecast April 2016) and Fibrias 1Q16 Earnings Release -FX considered by the consultant at R$/US$3.54. H2 cash cost was
estimated according to weighted average cost, after mill balance, converted at R$/US$3.54. Includes energy sales.

18

Gross capacity addition should not be counted as the only factor


influencing pulp price volatility.(1)

1.000

2,0
Horizonte II

Eldorado

BHKP prices - CIF Europe (US$/ton)

800

Rizhao
Trs
Lagoas

700
APP
Hainan

600
500
400

APP South
Sumatra(2)

Maranho

Santa F

Valdivia

1,6
1,4

Montes
del Plata Guaba II

Fray
Bentos
Mucuri
Veracel Nueva Aldea

1,8

1,2

Klabin

1,0
Chenming
Zhanjiang

Kerinci
PL3

Capacity (000 ton)

900

0,8

APP Guangxi

300

0,6

Oji
Nantong

200

0,4

100

0,2

0,0
2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

(1) Source: Hawkins Wright , Poyry and Fibria Analysis. Pulp price estimates according to Hawkins Wright (Dec/15), Brian McClay (Feb/16) and RISI (Feb/16)
(2) Partially integrated production.

19

In the last 15 years, pulp volatility has been just 8%...why?

160

BHKP - FOEX Europe (base 100)

CPI (base 100)

120

80

40

Dec-99
Apr-00
Aug-00
Dec-00
Apr-01
Aug-01
Dec-01
Apr-02
Aug-02
Dec-02
Apr-03
Aug-03
Dec-03
Apr-04
Aug-04
Dec-04
Apr-05
Aug-05
Dec-05
Apr-06
Aug-06
Dec-06
Apr-07
Aug-07
Dec-07
Apr-08
Aug-08
Dec-08
Apr-09
Aug-09
Dec-09
Apr-10
Aug-10
Dec-10
Apr-11
Aug-11
Dec-11
Apr-12
Aug-12
Dec-12
Apr-13
Aug-13
Dec-13
Apr-14
Aug-14
Dec-14
Apr-15
Aug-15
Dec-15
Apr-16

Market price closer to producers 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 June 7th, 2016

Lowest volatility among commodities

100 = January 1, 2012


181

104
98
84

Iron Ore

Soy Bean

Crude Oil

Sugar

BHKP - FOEX Europe

May-16

Mar-16

Jan-16

Nov-15

Sep-15

Jul-15

May-15

Mar-15

Jan-15

Nov-14

Sep-14

Jul-14

May-14

Mar-14

Jan-14

Nov-13

Sep-13

Jul-13

May-13

Mar-13

Jan-13

Nov-12

Sep-12

Jul-12

May-12

Mar-12

52
38
Jan-12

230
220
210
200
190
180
170
160
150
140
130
120
110
100
90
80
70
60
50
40
30
20

Exchange Rate (R$/US$)

Low volatility of hardwood pulp price, even though


new capacities have come on stream during the period.
Source: Bloomberg June 8th, 2016

21

The only commodity with lower volatility than FX

Historical Volatility of Commodities (US$)


37%

35%

34%
27%

27%

25%

25%

24%

16%

14%
6%

WTI Crude
Oil

Sugar

Nickel

Iron Ore

Copper

Soy

Ibovespa

LME
Metals

Cattle

FX

BHKP

Since January 1, 2009 up to May 31st, 2016

22

Financial and Operational Highlights


23

Each 5% depreciation of the Real increases EBITDA by around


R$420m and FCF by R$550m

Exchange Rate
Average (R$/US$)

2.00

1.76
670

Fibria net pulp price


(US$/t)

Fibria net pulp price


(R$/t)

EBITDA Margin

1.67

1.95

2.16

2.35

639

581

610

572

1,311

1,344

456

912

1,179

40%

29%

1,067

34%

1,133

36%

1,488
1,173

1,153

2011

2012

40%

3.33

3.59

3.65(1)

582

577

519(2)

1,951

2,071

1,894

53%

53%

1,560

1,558

39%

1,295

1,185

2013

2014

815

EBITDA (US$ million)


2009

2010

2015

1Q16 LTM 2016 (e)

(1) According to Focus Report (Brazilian Central Bank June 3rd, 2016) I (2) 2016 market consensus

24

Cash Production Cost (US$/t) LTM 1Q16

199

13
6

185

179

(47)

1Q15

Inflation

FX

160

(6)
(19)

Lower
energy price

Maintenance Non recurring Non recurring


Cash cost
Management Cash cost 1Q16
downtime
wood
energy and
1Q16 before
initiatives
chemicals
management
consumption
initiatives

Total nonrecurring

Recurring cash
cost 1Q16

Management initiatives gains partially offset the inflation impact

25

Cash Production Cost in dollars saw a decrease over the past 7 years

Fibria Cash Production Cost(1) (US$/ton)

264

281
242

231

234

220
186

2009 (2) 2010 (2)

2011

2012

2013

2014

2015

182

Consistently
controlling the
cash
production
cost

1Q16
LTM

(1) Constant Currency. (2) Excludes Conpacel

26

Net Results (US$ million) 1Q16

72
223

(24)
(114)
deferred

322
current

Adjusted
EBITDA

FX Debt

MtM
Hedge

Net
Interest

Deprec.,
amortiz.and
depletion

(188)

Taxes

251

(41)

Others (1)

Net Income

Non-recurring
effects
(1)

Includes other Exchange rate/monetary variations, other financial income/expenses and other operating income/expenses.

27

Free Cash Flow(1)


US$ million
329

317
225

194
125
29

84

77

113

111

53

51

103

130

158
112

-7
-77

-256
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16

EBITDA Margin
34%

33%

28%

30%

37%

37%

41%

39%

39%

41%

42%

41%

35%

35%

45%

50%

50%

56%

54%

52%

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

3.54

3.84

3.90

Average FX
1.60

1.63

(1) Before expansion capex

28

Free Cash Flow(1) 1Q16 LTM


US$ million

1,555

(498)

( 78 )

863
( 93 )

( 20 )

(3)
403
(460)

Adjusted
EBITDA

(1)
(2)
(3)
(4)

Capex
(ex-H2 project
& land deal)

Net
Interest

Working
Capital

Taxes

Others

FCF
(ex-H2 project
& land deal)

Capex
H2 &
land deal

FCF

Not considering dividend payments, capex related to the Horizonte 2 Project and the land acquisition in December 2015. Considers 1Q16 average FX 3.5897.
Not considering dividend payments.
Includes other financial results.
Considering the market cap. on March 31, 2015 corresponding to R$23.3 billion (US$7.3 billion).

29

ROE and ROIC (R$)


ROE = Adjusted EBIT(1)/ Equity before IAS 41(2)

25.1%

ROIC = Adjusted EBIT(3)/ Invested Capital before IAS 41(2)

25.3%

9.2%
5.7%

6.2%

2013

2014

6.9%

22.8%

23.4%

8.0%

3.4%

2012
Average
FX
(R$/US$)

Average
Net Price
(US$)

2015

2012

1Q16

2013

2014

2015

1Q16

1.95

2.16

2.35

3.33

3.59

Average
FX
(R$/US$)

1.95

2.16

2.35

3.33

3.59

581

610

561

586

576

Average
Net Price
(US$)

581

610

561

586

576

(1) Adjusted EBITDA CAPEX Net Interest Taxes


(2) International accounting standards for biological assets.
(3) Adjusted EBITDA CAPEX Taxes

30

Capital Structure: Fibria has achieved the lowest leverage ratio among
its Latin American peers
Net Debt/EBITDA (x)(1)

5.9

4.0

3.1
3.1
2.3

1.9
4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16
Fibria

S&P
Moodys
Fitch
(1)

Suzano

Klabin

CMPC

Arauco

Eldorado

Fibria

Arauco

CMPC

Klabin

Suzano

BBB-/Stable

BBB-/Stable

BBB-/Stable

BBB-/Negative

BB+/Stable

Ba1/Negative

Baa3/Stable

Baa3/Stable

Ba2/Stable

BBB-/Stable

BBB/Stable

BBB+/Stable

BBB-/Negative

BB/Positive

Fibrias historical data in BRL.

31

One of the best performances among Brazilian corporate issuers(1)

647

676

500

329

330

331

BRFOODS

BRAZIL

FIBRIA

(1) G-spread on June 9th, 2016

351

361

378

EMBRAER

KLABIN

SUZANO

384

GLOPAR

428

VALE

BRASKEM

GERDAU

PETROBRAS

32

.5

Strong credit quality


Interest expense, leverage and average cost of debt in US$

Historical G-spread (bps)

7.29

6.3

5.9

5.5
5.2

4.11

1.400

4.6

4.25

3.4

3.32

3.3

3.4

1.000

2.60
473

414

1.200

2.41
408

350
268

200

1.78

1.86

141

139

800
600
400

2009

2010

2011

5.2
Leverage(x)
4.6

2012

2013

2014

Cost
debt
(%)
Costofof
debt

3.4

2015

1Q16
LTM

200

2010

Interest Expense
(US$ million)

2011
Fibria 2020

2012

2013

Fibria 2021

2014

2015

Fibria 2024

3.3(1)

BBB-

BBB-

Ba1

33

Fibria is able to create value for its shareholders with capital discipline

FREE CASH FLOW

BIO-ENERGY AND

PULP

INDUSTRY
CONSOLIDATION ?

Growth with discipline

Best portfolio of projects

OTHER OPPORTUNITIES

DIVIDENDS

Complementary to pulp

Portocel

Land and forest

WITHOUT JEOPARDIZING CREDIT


METRICS
34

BACK UP
35

Expansion Project Horizonte 2


36

What is the importance of growth for Fibria?

Competitiveness

Commercial
positioning

Long-term growth
potential

Wider fixed costs dilution

Cost curve position improvement

Greater bargaining power with suppliers

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

37

Why expand Trs Lagoas?


ESTIMATED BHKP CAPACITY RANKING 2017 (000T)

Brownfield Project, synergies with current


operations

Modern plant, prepared for potential


expansion

Availability of wood and low average


distance from forest to mill

Forest based on the optionality concept and


prioritizing lease and partnership models

Additional energy surplus of 130 MWh

Start-up: 4Q2017
Capacity: 1.95 million tons

8,150

Fibria
CMPC
RGE/APRIL
Suzano
APP
Eldorado
UPM
Stora Enso
Arauco
Cenibra
ENCE
Altri
IP
Marubeni
Mitsubishi
Oji
Mondi
Nippon Paper
Verso
Resolute
Georgia-Pacific
Portucel Soporcel
Lwart
Pulp Mill Holding
Domtar
Klabin
Others
0

2000

4000

6000

8000

Current Capacity

New Capacity Klabin Agreement

New Capacity

New Capacity Horizonte II Project

Source: Poyry and Fibria Analysis (as of May 2015)

38

Pulp sales destination: Fibria growing where the market grows

37%
43%
19%

24%

36%
24%

8%

9%

Total sales volume distribution


after H2 start up(2)
Current net revenue distribution(1)

(1) Considers 1Q16 last twelve months. | (2) Includes Klabins sales volume

39

Project schedule on time, on budget

Purchase of the
industrial plants

Beginning of
infrastructure and
purchase of the TGs

Beginning of
construction

Negotiations with
concession holders and
Port of Santos tendering

2Q15

Beginning of forest
machinery deliveries

3Q15

2015

Definition of outbound
logistics formats

4Q15

Beginning of
assembly

Hiring of operational
team

1Q16

Beginning of
harvest

Initial hiring of harvest


workers

2Q16

Utilities clearance
and commissioning

L1 interconnections
during maintenance
downtime

3Q16

2016

Startup

4Q16

1Q17

2Q17

3Q17

4Q17

2017
40

Horizonte 2 project site overview

41

Fibrias production volumes

Current Production ('000 t)

Klabin's Puma Project('000 t)(1)

660

5,188

2009

(1)The

5,231

2010

5,184

2011

5,299

2012

5,259

2013

5,274

2014

5,185

2015

2016

2017

Horizonte 2 ('000 t)(1)

7,940

8,050

8,150

8,150

8,150

1,740

1,850

1,950

1,950

1,950

900

900

900

900

900

5,300

5,300

5,300

5,300

5,300

2018

2019

2020

2021

2022

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.

42

Forestry Base

Forestry base required:


H1:

120,000 ha

H2:

187,000 ha

Total:

307,000 ha

Average distance from forest to mill H1 + H2 -> up to 100 km (1st cycle)


2nd cycle average distance should decrease due to less need for 3rd party wood
43

Logistics

Mato Grosso
Brasilia

Gois
Mato
Grosso do
Sul

Port Terminal 32

44

Capex
Update for the current FX level
CAPEX (US$ billion)(1)
2%

2.5
0.05

26%

0.65

2.4
0.10
0.45

1.80

1.84

Original

Revised

72%

BRL

EUR

4%
19%

77%

USD and others

There are opportunities for capex postponement, WITHOUT delay in


the project startup
Physical progress(2) = 32.5%
Disbursed capex(2) = 15%
(1) FX: R$ 3.65/US$ | (2) As of April, 2016

45

Capex
Flexibility in the Timetable, without changing the start up date
Original (May, 2015)

Nov, 2015
60%

45%

37%

7%

7%
2015

33%

2016

2017

2018

4%

3%

2019 and
thereafter

2015

Current

2016

1%

2018

2019 and
thereafter

50%
41%

2%
2016

3%

Possible Scenario

53%

2015

2017

= 93%

2017

36%

3%

1%

2%

2018

2019 and
thereafter

2015

= 86%
9%

2016

2017

2018

3%
2019 and
thereafter

46

Funding
Cost and maturity

1Q16

H2

Average Cost (US$ p.a)(1)

3.4%

2.1%

2.8%

Average Maturity (years)

4.2

5.8

4.7

1Q16 + H2

Amortization Schedule (2) 1Q16 Proforma with TLS II US$ million


951
742
641
529
440
289
177

161

147

135

123

100
76

2016

2017
BNDES

(1) Considering swap curves.

2018
Bond

2019
PPE

2020
NCE

2021

2022

ACC/ACE

CRA

2023
ECA

2024

2025

2026

Outros

FDCO

Total

2027

2028

| (2) Debt FX 1Q16: 3.5589 / FX considering new funding for the TLS II Project: 3.5589

47

Funding
Sources US$ million

0.6
0.4
0.4

2.4

0.2
0.2
0.6
BNDES

CRA

FDCO

ECAs

Export
pre-payment

Working capital
release(1)

Total

All funding is officially approved. BNDES, FDCO and ECAs will be


withdrawn according to capex execution

(1) Working capital to be released in 2016 and 2017 in commercial deals with Klabin and shipping agreements. Main impacts over accounts payable and receivables.

48

Investment Grade reaffirmed with stable outlook, despite the


sovereign downgrade

April, 2016
Its robust performance should provide enough resources to fund the equity portion
of its new pulp mill, Horizonte 2, and would help it to reduce leverage towards the
end of 2017, when the new mill starts operations. We expect leverage metrics to
remain slightly under pressure this year due to the debt load from the investment. But
these metrics should gradually decline in 2017 and 2018.

Feb, 2016
Leverage to Temporarily Increase: Fitch projects net leverage to remain below 2.5x
during the construction of the Trs Lagoas mill, quickly declining to below 1.5x by the
end of 2018.

(1) According to rating agency methodology

49

Horizonte 2 project assumptions


UNIT

R$

US$

Pulp production/year

k tons

1,950

1,950

Expansion capex(1)

$ billion

8.7

2.4

Expansion capex(1)

$/t

4,481

1,229

Sustaining capex(2)

$/t

206

58

Cash production cost(3)

$/t

326

92

MWh

130

130

R$/US$

2.80

All in cash cost (estimated range)(4)

$/t

250-300

Pulp price(5)

$/t

523

Free Cash Flow (estimated)

$/t

223-273

Payback period (estimated)

years

4.5-5.5

Energy surplus
Project approval FX

(1) Includes chemical leasing and investments in order to increase capacity to 1,950 kt/year (FX@3.65).
(2) Estimated sustaining capex in perpetuity (FX @ 3.65).
(3) Estimated weighted average cost, after mill balance. Includes energy sales (FX @ 3.54).
(4) Cash cost + freight + SG&A + Sustaining Capex + Interest + taxes (FX @ 3.54)
(5) 2016 market consensus.

50

Final Remarks

Economies of scale
Synergies with current operations
Wood availability and low distance from forest to mill
Fibrias 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

51

Dividends
52

Policies approved by the Board of Directors

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

53

Approval of Dividend Policy


Commitment to Corporate Governance best practices.

Proposed dividends based on cash generation, taking into consideration


the companys strategic planning and in line with its policies, notably the
Indebtness and Risk Management policies.
Preserving Investment Grade.

Extraordinary dividend if Policy criteria are met.

54

Dividends
2015
April 28, 2015

May 14, 2015

OGM: Dividend
Dividend Payment of
distribution approval: US$49 million
minimum compulsory
+ additional

Oct. 22, 2015

Dividend Policy
Approval

Nov. 30, 2015

Dec. 9, 2015

Dec. 17, 2015

EGM: Interim Dividend Dividend Payment of Dividend


US$532 million
distribution
Payment Approval
proposal of US$78
million(2)
approved by the
Board of Directors

Dividend yield as of Dec, 31, 2015 = 7.5% (R$) | 8.3% (US$)


Dividend yield as of Dec, 31, 2014 = 11.6% (R$) | 8.7% (US$)

2016
April 27, 2016

Mid-May, 2016

OGM approved
Dividend payment of
dividend distribution
US$80 million.
of US$80 million(1)
(1.1% of dividend yield
as of Dec, 31, 2015).

(1) Considering March 7, 2016 FX R$/US$3.7714

Mid-November, 2016

Extraordinary
dividend
appraisal

Mid-December, 2016

Extraordinary
dividend payment
(if approved)

55

Dividends vs. Leverage

2,50

2.30

2,000
1.95

2,00

1.86
1.78

1,50

1.58

1,00

0,50

148
0,00

1Q15

2Q15

3Q15

Dividends (R$ million)

4Q15

1Q16

Leverage (x)

56

Historical Dividend Yield(1)

Considering
Market Cap
as of
December,
31st, 2015

(1) Source: Bloomberg Financial Analysis - Multiples

57

Best dividend yields of 2015 among Brazilian corporate issuers


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

Source: Economtica the dividend yield calculation considers share price at the beginning of 2015

58

Cost reduction initiatives and industry statistics


59

Structural Competitiveness

1. Third-party wood reduction

NPV: US$0.4 billion

2. Forestry operations productivity

NPV: US$0.6 billion

3. Industrial

NPV: US$0.1 billion


Total : US$1.1 billion

60

1. Third-party wood reduction


Wood supply recovering to normal condition

Peaking in 2016;

Returning to 2012s levels by the end of 2017;

NPV of R$1.4 billion from peak to normalized level.


Third-party wood decrease will benefit
opex and capex

% Planting

77% 84% 34% 63% 73% 67%

68% 75%

67%

50%

% wood from third parties

45%
40%
35%

30%
25%
20%
15%
10%
5%
0%
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

62

1. Third-party wood reduction


Losango
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 Esprito Santo and Bahia States

Positive impact over industrial costs due to better productivity

63

2. Forestry operations productivity


Structural change improving competitiveness

CLASSIFYING THE FOREST BASE BY CATEGORIES


45%
40%

40%

36%
33%

35%
30%
25%
20%

20%

20%
15%

15%
10%

10%

10%

10%
6%

5%
0%
01 - Diamond

02 - Gold

03 - Silver

Current effective area

04 - Bronze

05 - Lead

Future effective area

The distribution costs by classes help us to apply resources


in order to optimize wood production
64

2. Forestry operations productivity


Identifying opportunities based on these combinations

Possible Restrictions

Declivity
0: Higher than 35
1: Btw 24and 35
2: Btw 0 and 24

Conservation
Areas
CAs(1)

0: Within
1: Within EPA(2) and
EBZ(3)
2: Out of EPAs and
EBZ

Municipal
Restrictions
0: Total restrictions
1: Partial restrictions
2: No restrictions

Possible Impediments

EPA Altitude

Urban Zones

0: Higher than
1800m
1: Lower than
1800m

0: Urban Zones
1: Outside urban
areas

Remnants of
native
vegetation
0: Remnants areas
1: Outside remnants
areas

Possible combinations
X 0, 1 and 2, removed;
(1)
(2)
(3)

Conservation Areas
Envionmental Protection Areas
Environmental Buffer Zones

4 e 8, high potential
65

2. Forestry operations productivity


Cost and Capex KPIs were also included in this geo-model

Silviculture

Harvest

Roads
Transportation

66

2. Forestry operations productivity


Harvest
Mixed Harvest Mechanization (Hilly areas)

PROJECT DESCRIPTION (JACARE UNIT)

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

67

2. Forestry operations productivity


Transportation
PIFF
Woodchip transportation

Timber transportation

PROJECT DESCRIPTION (ARACRUZ, JACARE AND TRS LAGOAS UNITS)

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

68

2. Forestry operations productivity


Transportation
Maritime Wood Shipping Project

PROJECT DESCRIPTION (ARACRUZ UNIT)


Capex and Opex reduction;

Capex: R$38 million

Increase in cargo handling due to increase in

NPV: R$95 million

stack height volume

Startup: Jan/2017

Reduction in heavy truck road traffic

69

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


100%

100%

90%

80%

70%

60%

50%

40%
20%

30%
10%

0%
2015

2016

2017

2018

2019

2020

70

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

71

3. Industrial: Biological Sludge Dryer


Biological Sludge Dryness Process
Operational Flow Conditioning and biological sludge burn
Sludge drying and burn in biomass boiler

00

Effluent+Sludge
Aeration Tank

Sludge Dryer
Biological
Sludge Tank

00

Biomass
Boiler

Biomass Pile

PROJECT DESCRIPTION (JACARE UNIT)


Variable cost reduction associated
with the disposal of sludge operations
in external landfill

Capex: R$18 million


NPV: R$100 million
Startup: Dec./2016

72

Fibrias tax structure


Description and Amount
(a) Operating income
(-)(b) Goodwill (Aracruz
acquisition)

(-)(c) Forestry Capex in MS

Maturity

As stated in the income statement


- Annual tax deduction: US$ 23 million (tax)
2018
- Remaining Balance mar/16: US$ 0.216 billion (base)
2016 tax deduction related to depletion: US$ 5.7 million

Undefined

(+/-)(d) Exchange variation


(cash)

----------

----------

(+/-)(e) Other

----------

----------

state (net)

Tax base before


compensations

(a) + (b) + (c) + (d) + (e)

- Up to 30% of tax base before compensations


(f) (-) Tax loss carryforward

Undefined
- Balance up to mar/16: US$ 50 million (base)

(g) Tax base

Tax base before compensations tax loss carryforward (f)

----------

Tax base (g) * 34%

----------

Balance mar/2016:
-PIS/COFINS: US$ 168 million
-Advanced tax payment (IR and CSLL): US$ 240 million

Undefined

(h) Income tax


(i) (-) Federal tax credits(3)

Cash Tax

Income Tax (h) tax credits (i)

TAX PAYMENT (cash basis)


2010

2011

2012

2013

2014

2015

1Q16

US$ 9 million

US$ 2 million

US$ 8 million

US$ 14 million

US$ 12 million

US$ 23 million

US$ 1 million

(1) Considering FX 3.5589 | (2) Considering average FX for the period | (3) The company also has Reintegra credit, which impacts COGS US$ 26 million

72

Leadership Position
Industry Outlook(1)
Fiber Consumption
412 million t

59%

41%

Recycled Fiber
242 million t

Pulp
169 million t

18%

82%

Mechanical
30 million t

Chemical
140 million t

59%

41%

Integrated Mills
83 million t

Market Pulp
57 million t

54%

46%
Softwood/Other
26 million t

Hardwood
31 million t

30%

70%

Acacia/Other
9 million t

Eucalyptus
21 million t

75%
Other Eucalyptus
Pulp producers:
16 million t

25%

(1) Fiber Consumption, Recycled Fiber and Pulp: RISI | Market Pulp, Hardwood and Eucalyptus: PPPC Global 100 Report December 2015

73

Global Market Pulp Demand


Hardwood demand will continue to increase at a faster pace than Softwood
Hardwood (BHKP) vs. Softwood (BSKP) (000 ton)

Demand growth rate

40.000
35.000

000 ton

1999

2009

2019

Growth
19992009

Growth
20092019

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%

30.000
25.000
20.000

15.000

2014 - 2019 CAGR:


Hardwood: +2.5%
Softwood: +0.8%

10.000
5.000

Hardwood

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

Softwood

Source: PPPC report (Sept. 2015)

Source: PPPC reports. Excludes Sulphite and UKP market pulp (Sept./15)

Paper Production Runnability with BHKP

Source: RISI conference, August 2014.

74

Benefiting From Chinas Growth


Chinas Hardwood Imports of BHKP by Country(1)

World Tissue Consumption, 1991-2013(3)

(000s t)

2.215

(million t)

Latin America is the


leading exporter of BHKP
to China, accounting to
approximately 55% of
China's total imports in
1Q16.

2.368

1Q15

1.095

1Q16

1.292

LTM Growth
Rate +4.2%

30
25
20
15

503 453

BHKP Total

(kg/person/year)

35

530

10

525

Latin
Indonesia Others(2)
America (1)

47 49

40 43

USA

Canada

5
1

Western
Europe

1991 1996 2001 2006 2009 2010 2011 2012 2013


N.America
Middle East
Oceania

(1) includes South Africa and New Zealand. | (2) Includes China, Japan, Malaysia, Russia, Thailand and Vietnam.

China's Share of Market Pulp(2)


30%
25%

Between 2005 and 2015,


the Chinese market share
of eucalyptus shipments
increased by 20 p.p. (total
market pulp: + p.p.)

(million t)

10%

10%

12%

22%

21%

23%

23%

25%
12

14%
6
4

5%

0%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Eucalyptus

Hardwood

(Kg/capita/year)

Total

24

10

10%

(1)
(2)
(3)

L.America
Asia FE

14
24%

8
15%

E.Europe
China

Per Capita Consumption of Tissue by World Region(3)

17%

20%

W.Europe
Japan
Africa

% Compared to the global Market Pulp

15

15
12
7

N.
West Japan Oceania East LatAm
America Europe
Europe

China

Africa

PPPC Pulp China Flash Report March 2016


PPPC W20. Coverage for chemical market pulp is 80% of world capacity
RISI

75

Growth rate Chinese GDP vs. Eucalyptus Shipments to China


(Sept-09 = base 100)

250

206

200

150

100

74
50

China GDP

Eucalyptus Shipments

Source: Bloomberg and PPPC.

76

Commodities Differentiation
China GDP breakdown
8%

4%

4%

3%

3%

2%

2%

2%

2%

2%

2%

44%

47%

48%

48%

48%

48%

48%

46%

47%

45%

45%

49%

49%

48%

49%

49%

50%

50%

52%

51%

53%

53%

2008A

2009A

2010A

2011A

2012A

2013A

2014A

2015E

2016E

2017E

2018E

Consumption

Investment

Net Exports

China commodity demand - basis 100


Corn

Soybeans

Wheat

Crude oil

Iron ore

Sugar

BHKP
248
201
194
172
152
124
115

100
2008A

2009A

2010A

2011A

2012A

2013A

2014A

2015E

2016E

2017E

2018E

Source: Ita Macroeconomic Department and PPPC Oct/15

77

Global Paper Consumption


CAGR 1996 2006
Developed Markets: + 1.7%
Emerging Markets : + 6.0%

117,611

CAGR 2007 2016


Developed Markets: - 4.0%
Emerging Markets : + 4.1%

114,507

85,291

P&W
Consumption
(000 tons)(1)

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 2007 2016


Developed Markets: + 1.4%
Emerging Markets : + 6.7%

CAGR 1996 2006


Developed Markets: + 2.4%
Emerging Markets : + 6.9%

37,474

26,877
15,548

Tissue
Consumption
(000 tons)(1)

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

Source: RISI

78

Global Market BEKP Demand


Shipments of Eucalyptus Pulp
CAGR 2012-2015

8%

(1)

19%

Source: PPPC World 20 January/2015

3,787kt

3%

1,980 kt

6%

7%
387 kt

Total
(1)

North America

758 kt

662 kt

Western Europe

China

Others

Source: PPPC World 20 December/2015

79

mai-10
jun-10
jul-10
ago-10
set-10
out-10
out-10
nov-10
dez-10
jan-11
fev-11
mar-11
abr-11
mai-11
jun-11
jul-11
ago-11
set-11
out-11
nov-11
dez-11
jan-12
fev-12
mar-12
abr-12
mai-12
jun-12
jul-12
ago-12
set-12
out-12
nov-12
dez-12
jan-13
fev-13
mar-13
abr-13
mai-13
jun-13
jul-13
ago-13
set-13
out-13
nov-13
dez-13
jan-14
fev-14
mar-14
abr-14
mai-14
jun-14
jul-14
ago-14
set-14
out-14
nov-14
dez-14
jan-15
fev-15
mar-15
abr-15
mai-15
jun-15
jul-15
ago-15
set-15
out-15
nov-15
dez-15
jan-16
fev-16
mar-16
abr-16
mai-16

BHKP prices - CIF China (US$/ton)


Source: PPPC Global 100

900
800

800
700

700

600

500

500
400

400

200

100

2010
average:
250 ktons
2011
Average
379 ktons
2012
Average
370 ktons
2013
Average
439 ktons
2014
Average
504 ktons
2015
Average
538 ktons

Shipments (000 ton)

Benefiting From Chinas Growth


China: Eucalyptus pulp shipments

(000s t)

600

300
300

200

100

2016
Average
558 ktons

80

Global BHKP Market Pulp Supply Cost Curve

USD/Adt, 2013 cost level

COST CURVE EVOLUTION

Cost position
of marginal
producer

Cumulative Capacity Million t/a

Source: Pyry.

81

Current Zero Cost Collars

ZCC (Notional em USD MM)


Forward*
Put
Call

2T16
50
3,57
3,25
7,04

3T16
185
3,64
3,31
6,30

4T16
295
3,73
3,36
6,62

1T17
216
3,82
3,52
5,80

2T17
174
3,90
3,57
6,22

3T17
135
3,98
3,64
7,17

4T17
190
4,06
3,67
7,12

1T18
105
4,14
3,62
5,50

2T18
45
4,21
3,64
5,73

Notional (Total):
US$ 1,395 million

*forward curve average in the week of May, 16-20/2016.

82