Institutional Presentation 2Q14

August 2014

KLBN11

Institutional presentation 2Q14 August 2014

Disclaimer
The statements contained in this presentation related to the business outlook, operating and financial projections, and growth prospects
of Klabin S.A. are merely projections, and as such are based exclusively on the expectations of the Companys management concerning
the future of the business.
These forward-looking statements depend substantially on the market conditions, the performance of the Brazilian economy, the industry
and international markets, and therefore are subject to change without prior notice.
This presentation on Klabins performance includes non-accounting and accounting data, such as operating and financial information, as
well as projections based on Managements expectations. Note that the non-accounting data has not been reviewed by the Companys
independent auditors.
The Companys management believes EBITDA may provide useful information on the Companys operating performance and allow for
comparisons with other companies in the same industry. Note however that EBITDA is not a measure established in accordance with
generally accepted accounting principles of the International Financial Reporting Standards IFRS, and may be defined and calculated

differently by other companies.

A diferentiated company

Institutional presentation 2Q14 August 2014

Integration and Markets

Strongly linked to the
consumer market

750 k tonnes

coated boards

241 k ha
eucalyptus and
pine forests
494 k ha
Total area

1.0 mi tonnes

kraftliner

155 k tonnes

industrial bags

Food

68%

13%

Other consumer
goods

7%

Building

Others

250 k tonnes

200 k tonnes

650 k tonnes

o.c.c.

recycled paper

corrugated boxes

Fibers

Paper

Conversion

Sales volume destination

paper and packaging

End-users

Institutional presentation 2Q14 August 2014

Market position
PAPER

Leader in the Brazilian packaging paper market, where we allocate more than 50% of our capacity

Coated
Boards

675

Kraftliner

50%

market
share

thousand
tonnes sold
in 2013

Sole supplier of
liquid packaging board
in Latin America

40%
installed
capacity
377
thousand
tonnes sold
in 2013

Institutional presentation 2Q14 August 2014

Market position
CONVERSION

Leader in the Brazilian packaging market where we allocate more than 95% of our capacity

Corrugated
Boxes

Industrial
Bags

50%
market share

Second players
market share is 16%

16%

market share

SOURCE: ABPO DEC 2013

Second players
market share is 8%

Institutional presentation 2Q14 August 2014

From 2008 to 2013

COST REDUCTION
AND CHANGE IN
COMMERCIAL
PRACTICES

MONTE ALEGRE, PR
OTACLIO COSTA, SC
CORREIA PINTO, SC
FORESTRY UNIT

INSOURCING
MECHANIZATION OF
SILVICULTURE AND
HARVESTING

HIGH RETURN
INVESTMENTS
EXPANSION OF
EVAPORATION SYSTEM
OTACLIO COSTA
AND MONTE ALEGRE

BIOMASS BOILER
OTACLIO COSTA
AND CORREIA PINTO

HIGH VOLTAGE
TRANSMISSION LINE
MONTE ALEGRE

EXPANSION OF
CONVERSION
CAPACITY
NEW CORRUGATOR
JUNDIA DISTR. IND, SP
NEW CORRUGATOR
GOIANA, PE
NEW INDUSTRIAL BAGS
EQUIPMENTS
GOIANA, PE
NEW PRINTERS FOR
CORRUGATED BOXES
7

Institutional presentation 2Q14 August 2014

Adjusted EBITDA
2011

2010
GROWTH

7%

2012
GROWTH

2013
GROWTH

16%

31%
32%

26%

1,352

milllion
R$

34%
1,627

26%

MARGIN

962

34%

1,562
million
R$

million
R$

1,028

million
R$
(Last twelve
months)

million
R$

Sales volume of

1.7

million tonnes per year

1.8 million

tonnes per year

(excluding wood)

2010

2011

2012

2013

2Q14

Institutional presentation 2Q14 August 2014

From now on

COST REDUCTION

HIGH RETURN
INVESTMENTS

DEBOTTLENECKING AT
THE WOOD YARD
MONTE ALEGRE

FORESTRY UNIT

CORRUGATED BOXES
UNIT

BIOMASS DRYING
PROCESS
OTACLIO COSTA

Institutional presentation 2Q14 August 2014

Expansion projects
NEW CAPACITIES

debottlenecking
coated boards (PR)
STARTED IN JUL/2014

sack kraft
machine(SC)

110,000
Tonnes per
year

50,000

tonnes
per year

debottlenecking
PIRACICABA AND
ANGATUBA

STARTED IN
NOV/2013

80,000

50,000

Tonnes per
year

2013

recycled paper
machine(PE)

Tonnes per
year

2014

2015

PUMA
project

1,5 million
Tonnes per year

2016
10

Institutional presentation 2Q14 August 2014

Growth
3.5

Additional Capacities

1.7

million
tonnes per
year

2013

million
tonnes per
year

1.8

million
tonnes per
year

2014 E

2.0

million
tonnes per
year

2015 E

2016 E

11

6M14 Results

12

Institutional presentation 2Q14 August 2014

Highlights 6M14
VOLUME, NET REVENUE AND EBITDA

Net revenue
(R$ million)

Adjusted EBITDA
(R$ million)
2,355

Sales volume
(excluding wood tsd tonnes)

0%

25%

758

24%

693
861

860
30%

32%

70%

68%

6M13

2,160

6M14
Domestic market

75%

76%

6M13

6M14

6M13

6M14

Export market

13

Institutional presentation 2Q14 August 2014

Paper business unit

Kraftliner

169

191

54%

65%

46%

35%

6M13

6M14

305
257

6M13

-5%

Coated
Boards
Kraftliner
Recycled

Kraftliner and coated

boards

326

311

44%

44%

54%

56%

6M13

6M14

Thousand tonnes
Domestic market

752

6M13

6M14

792

6M14

R$ million
Export market

14

Institutional presentation 2Q14 August 2014

Conversion business unit

343

1.058

351

977

6M14

6M13

Total

conversion

6M13

Thousand tonnes

6M14

R$ million

Corrugated boxes
Industrial bags
Corrugated boxes and
industrial bags

15

Institutional presentation 2Q14 August 2014

8,000

6.0

Net Debt/Adjusted Ebitda

5.5

7,000 LAST TWELVE MONTHS

5.0
4.5

6,000

4.0
3.5

2.0

2.3

2.5

2.4

2.5

2.2

2.4

2.4

2.6

2.5

1.7

1,893

1.7

3,985

3,595

3,437

3,136

3,278

3,090

2,674

2,735

2,002

1,000

2,313

3,000

3,014

4,000

2,000

3.0
2.0
1.5
1.0

2,824

2.1

2.4

2.5

2,711

5,000

0.5
0.0
-0.5
-1.0
-1.5

-2.0
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 Jun-14
Net Debt

Net Debt / EBITDA (LTM)

16

Institutional presentation 2Q14 August 2014

Capex
R$ MILLION

2011

2012

2013

2014E

2015E

MAINTENANCE

296

390

369

372

360

SPECIAL PROJECTS AND

EXPANSION

159

264

431

431

VALE DO CORISCO

428

99

2,762

3,470

883

654

899

3,565

3,830

PUMA PROJECT

TOTAL

17

Project Puma

18

Institutional presentation 2Q14 August 2014

The Project
LOW OPERATION COST

ANNUAL PRODUCTION CAPACITY

1.5 MILLION
TONNES OF PULP

1.1 million

tonnes of SHORT
FIBER

400 thousand
tonnes of

LONG FIBER

part converted into fluff

272 MW

of ELECTRICAL ENERGY
production

SELF SUFFICIENCY

118 MW
for internal
use

154 MW
to the market
enough to supply a
city of 500 thousand
inhabitants

19

Institutional presentation 2Q14 August 2014

Project features
PUMA

production of hardwood pulp (eucalyptus) and

softwood (pine)
fluff production
lowest cash cost in Brazil
domestic sales

20

Institutional presentation 2Q14 August 2014

Project features
LOCALIZATION

KLABIN FORESTS

PUMA

VALE DO CORISCO
FORESTS

MONTE ALEGRE
PARANA STATE

21

Institutional presentation 2Q14 August 2014

Project features
LESS FORESTRY AREA NEEDED

300 thousand
hectares

Europe

700thousand
hectares

nordic countries

238 thousand
planted forest
needed for a 1.5
million tonnes
of hardwood
pulp mill

160

thousand
hectares

Chile

hectares

south USA

140 thousand
hectares

Brazil

100 thousand
hectares

KLABIN PUMA

HUGE

PRODUTIVITY

22

Institutional presentation 2Q14 August 2014

Products
PUMA PROJECT PRODUCES 3 DIFFERENT TYPES OF FIBER
that could lead to combined sales to the same client

EUCALYPTUS PULP
BEKP

IN BALES

BEKP: bleached eucaliptus kraft pulp

BSKP: bleached softwood pulp

PINE PULP
BSKP

IN BALES

FLUFF
IN REELS
MADE FROM BSKP

23

Institutional presentation 2Q14 August 2014

World demand
BLEACHED PULP

52 MILLION

TONNES IN 2013

16.5

17.4 EUCALIPTUS
million tonnes
million tonnes

LONG FIBER

28 million tonnes

24 million

SHORT FIBER

tonnes

LONG FIBER

11.6

million tonnes

6.5 OTHER

million
tonnes

SHORT FIBER

FLUFF

24
SOURCE: HAWKINS WRIGHT

Institutional presentation 2Q14 August 2014

World demand
SHORT FIBER
CAGR

3.3%

32.2

million tonnes

28.2

SHORT FIBER

million tonnes

SHORT FIBER

2013
SOURCE: HAWKINS WRIGHT

2013
2017
anualizado

2013

25

Institutional presentation 2Q14 August 2014

Market
LONG FIBER

LONG FIBER IMPORTS IN

BRAZIL
GROWTH

5%

410
thousand
tonnes
DOMESTIC MARKET FOCUS
IMPORTS SUBSTITUTION

IMPORTED
LONG FIBER

2012
SOURCE: BRACELPA DEC 2013

429
thousand
tonnes
IMPORTED
LONG FIBER

2013

26

Institutional presentation 2Q14 August 2014

Market
FLUFF

DISPOSABLE DIAPERS CONSUMPTION IN BRAZIL

CAGR

CAGR

9%

8%

R$ 3.7 billion

R$ 4.3 billion

fluff domestic demand is expected to

grow significantly
DISPOSABLE
DIAPERS
imports substitution

DISPOSABLE
DIAPERS

Major markets:
infant and adult diapers and women
disposal

R$ 2.9 billion
DISPOSABLE
DIAPERS

2010

2013

2015E

27
SOURCE: EUROMONITOR INTERNATIONAL

Institutional presentation 2Q14 August 2014

Fluff, long fiber and short fiber prices

1050
1000
950
900
850
800

Fluff
SBSK
BHKP

750
700
650
600

CIF: COST, INSURANCE AND FREIGHT INCLUDED

SOURCE: RISI/FOEX

28

CIF Europe price (US$/tonne)

1100

Institutional presentation 2Q14 August 2014

Global cash cost (short fiber)

600

500

400

PUMA
5

300

10
15
20
annual capacity (millions of tonnes)

CIF: COST, INSURANCE AND FREIGHT INCLUDED

SOURCE: HAWKINS WRIGHT

25
29

CIF Europe cash cost (US$/tonne)

700

Institutional presentation 2Q14 August 2014

Commercial strategy

PUMA

SHORT
FIBER

LONG
FIBER

FLUFF

DOMESTIC
MARKET

EXPORTS

KLABIN
WILL NOT AIM FOR
LARGE
VOLUMES

INTEGRATION 6

30

Institutional presentation 2Q14 August 2014

Logistics
SHORT DISTANCES

INBOUND

DOMESTIC
MARKET

OUTBOUND
highway

72 Km

forestry average
distance
forests

pulp mill

441 Km

railway to the port

Paranagu port
EXPORTS

31

Institutional presentation 2Q14 August 2014

Capex and Funding

CAPEX
R$

FUNDING

7.2 BILLION
R$

0.6 billion

R$

7.2 BILLION
R$

OFF THE FENCE(recovered)

R$

0.8 billion

0.6 billion
IDB

R$

0.7 billion

ECAs

RETURNABLE TAXES

R$

1.7 billion

CAPITALIZATION

R$

5.8 billion

CONTRACTED

INDUSTRIAL CAPEX
R$

4.2 billion
BNDES

32

Institutional presentation 2Q14 August 2014

Project Status
PUMA
Earthmovement well advanced (around 80%)

100% of industrial equipment contracted

Civil construction already started

More than 3,000 people working on the site

Start up: march 2016

33

Institutional presentation 2Q14 August 2014

Project Status

34

Appendix

Institutional presentation 2Q14 August 2014

Income statement

36

Institutional presentation 2Q14 August 2014

Balance Sheet

Thank you!

k l a b i n . c o m . b r
38