March 2015

Corporate Presentation

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.

The Company

Shareholder Structure

Votorantim
Industrial S.A.
(1)

29.42%

BNDES
Participações (1)

30.38%

Free
Float (2)

General
Meeting

40.20%
Fiscal
Council
20% independent
members
Role of CEO and
chairman is split

Board of
Directors

Listed on Novo Mercado, highest level at BM&FBovespa:
• 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

Finance
Committee

Statutory
Audit
Committee

Personnel and
Remuneration
Committee

Sustainability
Committee

Innovation
Committee

30%
independent
members

100%
independent
members

50% independent
members

45% independent
members

-

Policies approved by the Board of Directors:
• Indebtedness and Liquidity
• Market Risk Management
• Risk Management
• Corporate Governance

• Financial Statements in International Standards – IFRS

• Related Parties Transactions

• Adoption of Arbitration Chamber

• Anti-Corruption

• SEC Registered ADR Level III program
(1) Controlling group
(2) Free Float 40.14% + Treasury 0.06%

• Information Disclosure

• Securities Trading
• Antitrust
• Genetically Modified Eucalyptus

A Winning Player
Superior Asset Combination

Belmonte
Veracel
Caravelas
Portocel
Aracruz
Três Lagoas

Main Figures – 4Q14 LTM

Pulp capacity

million tons

5,300

Net revenues

R$ billion

7.1

Total Forest Base(1)

thousand hectares

961

Planted area(1)

thousand hectares

560

R$ billion

7.6

Net Debt/EBITDA (in Dollars)(2)

X

2.4

Net Debt/EBITDA (in Reais)

X

2.7

Net Debt

Jacareí
Santos

Port Terminal

Pulp Unit

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.

Fibria’s Units Industrial Capacity
Três Lagoas – Mato Grosso do Sul – 1,300 thousand t/year

Aracruz – Espírito Santo – 2,340 thousand t/year

Jacareí – São Paulo – 1,100 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

Fibria’s Strategy

Leadership Position
Market Pulp Capacity Ranking 2014(2) (000t)

Industry Outlook(1)
Fiber Consumption
406 million t

59%

41%

Recycled Fiber
238 million t

Pulp
168 million t

18%

82%

Mechanical
30 million t

Chemical
138 million t

59%

41%

Integrated Mills
82 million t

Market Pulp
56 million t

54%

46%

Softwood/Other
26 million t

Hardwood
30 million t

33%

67%

Acacia/Other
10 million t

Eucalyptus
20 million t

74%
Other Eucalyptus
Pulp producers:
15 million t
(1)
(2)

5,300

Fibria
APRIL
Arauco
Suzano
CMPC
UPM-Kymmene
Georgia Pacific
Paper Excellence
Metsa Group
Stora Enso
Weyerhaeuser
Ilim
Eldorado
Mercer
Domtar
IP
Sodra
Resolute Forest
Canfor
ENCE
0
26%

Fiber Consumption, Recycled Fiber and Pulp: RISI | Market Pulp, Hardwood and Eucalyptus: PPPC Global 100 Report December 2014
Hawkins Wright – Outlook for Market Pulp, December 2014

2000

4000

6000

Bleached Softwood Kraft Pulp (BSKP)
Bleached Hardwood Kraft Pulp (BHKP)
Unbleached Kraft Pulp (UKP)
Mechanical Pulp (MP)

Fibria’s Commercial Strategy

Differentiation: Customized pulp products to specific paper grades

Sole supplier to key customers

Long term contracts

Competitive logistics set up

Fibria’s Pulp End Use
Printing &
Writing
31%

Tissue
51%

Speciatilies
18%

41%
Europe

24%

Lustenau

N.America

25%
Asia

Miami

Hong Kong

10%
L.America

São Paulo

Fibria’s Sales Distribution
Fibria ‘s Offices

Source: Fibria – 2014

Door to Door Operations
Pulp mill
Outbound
Logistics
Forest
Integrated logistics solutions
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
Efficient Logistics Setup

Client

Port

Sea Freight

10

Pulp and Paper Market

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
(1) Source:

RISI

Emerging Markets

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

2013 - 2018 CAGR:
Hardwood: +2.8%
Softwood: +0.7%
35.000

Million tons

1998

2008

2018

Growth
1998-2008

Growth
2008-2018

Hardwood

15.0

24.5

32.8

63%

34%

Eucalyptus

6.0

14.2

23.4

137%

63%

Softwood

17.6

21.6

24.8

23%

15%

Market Pulp

32.6

46.1

57.1

30.000
25.000
20.000
15.000
10.000
5.000

Hardwood

Source: PPPC

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

0

Softwood

Gross capacity addition should not be counted as the only factor
influencing pulp price volatility….(1)
List Price bottoming at US$650/t in 2011 and US$724/t in 2014

APP South
Sumatra(2)

1.000

1,8

BHKP prices - CIF Europe (US$/ton)

800

1,6

Rizhao

Maranhão

Três
Lagoas

700
APP
Hainan

600
500
400

Eldorado

Fray
Bentos
Mucuri
Veracel Nueva Aldea
Santa Fé

Valdivia

1,4

Montes
del Plata Guaíba II

1,2

Klabin

1,0
Chenming
Zhanjiang

Kerinci
PL3

Capacity (000 ton)

900

2,0

0,8

APP Guangxi

300

0,6

Oji
Nantong

200

0,4

100

0,2

0

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/14), Brian McClay (Jan/14) and RISI (Dec/14)
(2) Partially integrated production

14

Capacity closures DO happen…

Closures of Hardwood Capacity Worldwide
(000 ton)
-85

-105

-540

-500

-830
-910
-1,085
-1,180
-1,260
2006

2007

2008

2009

2010

2011

2012

2013

2014-2016 E
as of Dec.14

Source: PPPC and Fibria

15

Total delivered cash cost will also have an influence on bottom prices
Total Cash Cost of BHKP delivered to Europe (US$/t)
Capacity
(k tons):

1,775

705

580

570

1,660

1,055

2,315

335

545

3,790

330

1,015

3,950

7,480

Interest
71

4Q14 net price:
US$ 552/t

46
69

41

86

121

34

38

41
48

55

38

67
111

498

= 31,405

5,300

508

456

468

420

404

424

424

W/K
Interest

119

Capex
Income Tax

51

SG&A

61

406
342

315

311

297
235

Cash Cost (US$/t)

18
39

186

Delivery (US$/t)

Source: Hawkins Wright (Outlook for Market Pulp, December 2014) | Fibria’s 4Q14 considering a FX of R$/US$2.54. | “Brazil ex-Fibria” 3Q14 considering FX of R$/US$2.27.
Gray bar includes cash expenses as Interest, CAPEX, SG&A and Taxes (Source: RISI and Fibria).

16

Tissue Market
Per Capita Consumption of Tissue by Region, 2013(1)
Kg/capita/year

World Tissue Consumption, 1991-2013(1)
Million tons

35

LTM Growth of
+4.2%

30
30

25
24

25

20

Growth
Potential

20
15

15

15

15

10
12

5

10

7

6

5

0

5
1

0
N.
West Japan Oceania East LatAm
America Europe
Europe

(1) Source:

RISI

China

Africa

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

Pulp Projects Backlog
Even though there is an extensive pulp projects backlog, there are important question marks regarding
new projects
Main Questions About Capacity


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 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

-

Unconfirmed

* 1.1 million tonnes of hardwood and 400 thousand tonnes of softwood

Financial Highlights

4Q14 Results
Net Revenue (R$ million)

Pulp Production and Sales (‘000 t)
1.441
1.410
1.372

1.358

1.381

2.001

1.958
1.746

1.345

4Q13

3Q14
Production

4Q14

466 466

3Q14

4Q14

Sales

EBITDA (R$ million) and EBITDA Margin (%)

Cash Production Cost (R$/t)

478 502

4Q13

472 472

45%

42%
35%

906

823
613

4Q13

3Q14

Cash cost ex-scheduled downtimes

4Q14
Cash cost

4Q13

3Q14

4Q14
20

Indebtedness

Debt (US$ million) x Leverage (US$)

Interest (US$ million) x Cost of Debt (US$)

7.5

6.3
4.1

8.6

4.2

3.3

6.3

2.6

2.7

473

5.9
414

5.5

408

5.2

2010

2011
Gross Debt

2012

2013

2014

3.4

350
268

3.1 2.8

2009

4.6

200

2009

2010

2011

2012

2013

2014

Net Debt

Free Cash Flow
Increase

Interest
Reduction

Cost of Debt
Reduction

This dynamics
creates a virtuous
cycle

21

Debt Profile
Average Term: 55 months

893

Average Cost: 3.4% p.y.
600

Debt
Amortization
Schedule at
Dec/2014
(US$ Million)

632

600

(revolver)

459
375

364

363
223
293

93

(caixa)

Liquidez

2015

2016

Pré-pagto.

Cost of Debt
Foreign Currency (% p.a.)

2017

2018

BNDES

2019

NCE

2020

2021

ACC/ACE

Voto IV

22

3

2022

2023

2024

Bond

Debt by Currency

7%

4.6%
3.4%

Dec/13

Dec/14

93%
Local Currency
Foreign Currency

22

Net Results (R$ million) – 2014

Hedge
∆ FX Debt

3,530
(112)

2,791

(696)

851

(504)

(1,874)

(380)

141
Adjusted
EBITDA

Befiex

Other nonreccuring exp.
/non-cash

EBITDA

∆ FX Debt / Early prepaid Net Interest
Hedge

debt

Deprec.,
amortiz.and
depletion

Non-recurring
effects
(1)

Includes other exchange rate/monetary variations and other financial income/expenses.

Mandatory dividends of R$37 million.

Taxes

(54)
Others (1)

163
Net Income

Investor Relations
E-mail: ir@fibria.com.br
Phone: +55 11 2138-4565
Website: www.fibria.com.br/ir