You are on page 1of 19

Corporate Presentation

February, 2012

1

Disclaimer

The information contained in this presentation may include statements which constitute forwardlooking 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 forwardlooking 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 forwardlooking statements, which speak only for the date on which they are made.

2

The Company

3

VCP and Aracruz Merged to Create Fibria

Shareholder Structure

Votorantim Industrial S.A. 29.34%

BNDESPar 30.42(1)

Free Float 40.24%(2)

(1) (2)

Position as of January 31, 2012. BNDESPar has 21% linked to a Shareholder’s Agreement with Votorantim Industrial S.A. during the first 3 years and 11% during the following 2 years. Free Float 40.17% + Treasury 0.07%

4

Improved Corporate Governance

Improved Corporate Governance

Board and Committees

Listed on Novo Mercado, highest level of Corporate Governance at BM&F Bovespa
– – – – – Only 1 class of shares →100% vo<ng 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

Shareholders’ Meeting

Fiscal Council

Board of Directors

9 Members: 20% Independent Chairman ≠ CEO

Listed in the most important sustainability indexes

Board Advisory Committees(1)
Audit and Risks Personnel and Remuneration Finance Sustainability

Policies approved by the Board of Directors
– – – – – Liability and liquidity management Market risks Corporate governance Information disclosure Stock trading

Executive Officers

(1) Members’ performance assessed by independent consulting firm

5

A Winning Player
Superior Asset Combination Main Figures(1)

Pulp capacity Net revenues Total area Planted area
Belmonte Veracel Caravelas Portocel Aracruz

million tons R$ billion thousand ha thousand ha R$ billion X

5.25 5.8(1) 1,080(2) 612(2) 9.5 4.8

Net Debt Net Debt/EBITDA

Três Lagoas Jacareí Santos

Port Terminal

Pulp Unit

Source: Fibria (1) 2011. (2) As of December 31, 2011, including 50% of Veracel and excluding forest partnership areas (117 thousand ha).

6

Fibria´s Units Industrial Capacity
Três Lagoas – Mato Grosso do Sul – 1.3 million t/year Jacareí – São Paulo – 1.1 million t/year

Aracruz – Espírito Santo – 2.3 million t/year

Veracel – Bahia – 1.1 million t/year

7

7

Fibria’s Strategy

8

Clear Leadership Position

Industry Outlook (1)

Market Pulp Capacity Ranking 2010(2) (000t)
Fibria APRIL Arauco

Paper & Board 392 million t

5,250

57% Recycled Fiber 224 million t

43% Pulp 167 million t

APP Georgia Pacific CMPC Sodra Stora Enso Weyerhaeuser Suzano
37% Market Pulp 50 million t 50% 50% Hardwood 25 million t

20% Mechanical 33 million t

80% Chemical 134 million t

63% Integrated Mills 84 million t

Botnia/M-real UPM-Kymmene Domtar Ilim Mercer IP ENCE
63% Eucalyptus 16 million t

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

Softwood/Other 25 million t

37% Acacia/Other 9 million t

West Fraser Canfor Cenibra
32%

68% Other Eucalyptus Pulp producers: 11 million t
(1) (2)

0

1000

2000

3000

4000

5000

6000

RISI and PPPC (nov 2011): considers 2010 demand Hawkins Wright – January 2011

9

Relevant Market Share and Competitive Position in the Cost Curve

Fibria’s Market Share (1)

Average Cash Cost of BHKP delivered to Europe(2) (US$/t)

Mill Cash
10% 19%

Delivery

1000 800 600 120 400 200 464 500 501 493 70 39 41 85 423 42 456 33 426 57 359

SG&A Maintenance Capex Financial Expenses

69 316

51 310

55 246

Total Market Pulp: 52.6 million t

Total Hardwood Market Pulp: 26.7 million t

0

29%

Hardwood Cash Cost (US$/t) vs Capacity ('000 t)
800 700 Cash cost (US$/t) 600 500 400 300 200 100 0 5000 (1) (2) PPPC – World Chemical Market Pulp Global 100 Report – December 2011 (World Demand by Grade) Source: Hawkins Wright as July 2011 Report and Fibria 4Q11 10000 15000 Capacity ('000s t) 20000 25000 30000 Bleached hardwood kraft

10 million t

Total Eucalyptus Market Pulp: 17.2 million t

10

Exchange Rates and Inflation Affect the Cost Structure
Exchange Rate Currencies Evolution versus Dollar (Jan’03 = 100)
230 210 190 170 150 130 110 90 70 50 Jan-03 Apr-03 Jul-03 Oct-03 Feb-04 May-04 Aug-04 Dec-04 Mar-05 Jun-05 Sep-05 Jan-06 Apr-06 Jul-06 Nov-06 Feb-07 May-07 Aug-07 Dec-07 Mar-08 Jun-08 Oct-08 Jan-09 Apr-09 Jul-09 Nov-09 Feb-10 May-10 Sep-10 Dec-10 Mar-11 Jun-11 Oct-11 Jan-12 Rupia: -3% Canadian Dollar: 51% Chilean Peso: 31% Real: 78%

Cost Structure
• Global producers have been impacted by: Wood: cost of land and minimum wage growth above inflation Chemicals / energy / water: global demand for commodities add pressure on main raw materials • On top of that, Brazilian producers have also been impacted by: Freight: low governmental investment in infra-structure (ports, roads, etc) and higher oil prices Labor: cost in Brazil in dollar terms is higher than in some developed countries

11

Global Presence
Fibria’s Commercial Strategy
Differentiation: Customized pulp products to specific paper grades Sole supplier to key customers focused on eucalyptus pulp to the tissue market The top 10 customers represent, on average, 70% of sales Over 20 years of relationship with many of the main clients Global contracts
P&W 22% Specialities 24% Tissue 54%

2011 End Use

42%
25%
N.America Europe

Nyon Miami

Csomád

23%
Asia

Hong Kong

10%
L.America

São Paulo

Source: Fibria

Fibria Sales Distribution

Fibria Offices

12

Focus on Premium End-Uses

Fibria's Pulp Destination
Printing&Writing 22%

Market Pulp Destination
43%

20102010-2025 Demand Growth (CAGR)
1%

Tissue

54%

24%

4%

Specialities

24%

14%

3%

Newsprint

0%

Containerboard

8%

5%

Others

11%

3%

Source: Fibria 4Q11 Earnings Results, PPPC, RISI and Fibria

13

Financial Highlights

14

Quarter Highlights
4Q11 Results
4Q11 Pulp production (000t) Pulp sales (000t) Net revenues (R$ MM) Pro Forma EBITDA1 (R$ MM) EBITDA margin (%) Financial results (R$ MM) Net income (loss) R$ MM)
1

Pulp Production and Sales
4Q10 1,330 1,254 1,564 606 39% 35 162 4Q11 vs 3Q11 0% 13% -4% -18% -5 p.p. 4Q11 vs 4Q10 -2% 12% -11% -36% -11 p.p. -

103% 97% 5,054 4,909

3Q11 1,296 1,244 1,449 476 33% (2,015) (1,114)

99%

Sales x Production

1,299 1,408 1,399 390 28% (142) (358)

5,184 5,141
Sales Mix – 2011 Europe North Am Asia Others 42% 25% 23% 10%

4,600 4,754

2009

2010 production (000 t)

2011 sales (000 t)

Excludes Conpacel and KSR results in 4Q10

Cash Cost (R$/t)

Operating Excellence (000 t)
73% of Conpacel’s volume offset by additional production

+4%

2011 vs 2009: +9% Inflation: +13%

5,231 130 5,054 -177 471

5,184

481 443 425 432

448

4Q10

3Q11

4Q11

2009

2010

2011

2010 with Conpacel

Conpacel

2010 w/o Conpacel

Operating excellence

2011

15

Synergies
Net Present Value of Synergies (R$ billion)
Others 2% Industrial 27%

Supply Chain 21%

Estimated 4.5 3.4 2.7 2.3 0.5 2009 2010 2011

Actual 4.2 4.3 4.5
Tax 11% SG&A 16% Forestry 23%

2012

2013

2014

3 years ahead of schedule for our synergy capture goal of R$4.5 billion at NPV driven by: Additional production in the existing units Cost control (cash cost below inflation) Maintenance Capex reduced for 2012 >>> best practices adopted on the forest and industrial fronts

16

Debt
Key Figures
5.6 (R$ million) 4Q11 3Q11 4Q10 4Q11 vs 3Q11 4Q11 vs 4Q10 4.7 3.9 3.6 Gross Debt Cash1 11,324 1,846 11,314 1,772 12,022 2,205 0% 4% -6% -16% 1Q10
1.80 1.78
the hedge fair value of R$214 million negative. Cash and cash equivalents position was R$2,060 million.
1 Includes 2 Last

Net Debt/EBITDA2 (x)

4.2 2.9 3.2

4.8

2Q10
1.79 1.80

3Q10
1.75 1.69

4Q10
1.70 1.67

1Q11
1.67 1.63

2Q11
1.60 1.56

3Q11
1.63 1.85

4Q11
1.80 1.88

FX (R$/US$) average close

Net Debt

9,478

9,542

9,817

-1%

-3%

twelve months adjusted EBITDA

Debt Amortization Schedule (R$ million)

Highlights

Foreign currency

Local currency

6,519

1,092 609 2012 2013

937 2014

697 2015

643 2016

827 2017 2018-2021

- Cash position = R$ 1.8 bi - Cash position equivalent to 1.6x short term debt - Debt maturing in 2012 = R$ 1.1bi - Average debt maturity = 73 months - Covenants renegotiation successfully concluded without waiver
fee

17

Actions to Improve Free Cash Flow

R$ million EBITDA CAPEX

2011(1) 1,964 (1,240) • • •

2012 Focus on cost and expenses control and reduction Competitiveness Project 2012 approved CAPEX of R$ 1.0 billion

Dividends

(264)

Interest (net)

(383)

Focus on liability management

Tax Working capital Free Cash Flow
(1) Does not include liquidity events

(4) (178) (105) • Focus on continuous improvement (clients and suppliers)

18

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

19