2Q 2Q15 15 Res esults ults Pr Pres esentati entation on 0 - PowerPoint PPT Presentation

2Q 2Q15 15 Res esults ults Pr Pres esentati entation on 0

Disc sclai laime mer Certain statements in this presentation may constitute projections or forward-looking statements. Such statements are subject to known and unknown risks and uncertainties that could cause the expectations expressed to not materialize or the actual results to differ materially from the expected results. These risks include changes in future demand for the Company’s products, changes in factors that affect domestic and international product prices, changes in cost structures, changes in the seasonality of markets, pricing actions by competitors, foreign currency fluctuations and changes in the political and economic environments in Brazil, in emerging markets or internationally. 1

Stron ong cash generation ation in the year r and in the last t twelve ve months.. ths... Operational Cash Generation LTM¹ (R$ million) 3,333 2,077 (1,158) (98) Sustain Operational Cash Adjusted Working Capex Generation EBITDA Capital Note: (1) last twelve months ended on 6/30/2015  Operational cash generation is the adequate metric to evaluate the industry due to high sustain capex  Suzano’s main driver for variable remuneration  Goal: adequate ROIC for shareholders 2

... . allowed wed gross ss debt reductio ction with deleve vera raging ing accele lerati ration on Net Debt/Adjusted EBITDA (x) 5.2x 2x 5.1x 1x 5.1x 1x 5.1x 1x 5.0x 0x 4.8x 8x 4.7x 7x 4.5x 5x 5.0x 0x 4.9x 9x 4.1x 1x 4.8x 8x 4.8x 8x 4.8x 8x 4.7x 7x 3.9x 9x 4.5x 5x 4.2x 2x 3.3x 3x 3.1x 1x 3.7x 7x 2.9x 9x Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 BRL USD  Debt reduction  Gross debt: R$13.9 billion vs R$15.3 billion in March/15  Cash: R$2.9 billion vs R$3.9 billion in March/15  Net debt: R$11.0 billion vs R$11.4 billion in March/15  Debt cost reduction  BRL: 89.9% of CDI¹ vs 90.8% in March/15  USD: 4.0% p.a. vs 4.7% p.a. in March/15  Continuity of the Liability Management process Note: (1) Brazilian Interbank Deposit Future 3

An And furth further develop velopment of of the li liabil ility ity ma manageme ment pr progra ogram, m, with ith acc access ess to to new new fi fina nanc ncin ing so source urces at at competitive etitive costs ts Funding ding Amount unt Cost Term Syndicate ndicated USD 600 million ion Libor or + 2 2% p.a. 5 years rs Loan Loan CRA¹ BRL 675 million ion 101%DI DI² 4 years rs Total BRL 2.5 billi lion on  Pre-payment of debt in the total amount of R$3.3 billion  Financial expenses reduction of around R$70 million/year  Continuous search for alternatives to reduce cost and/or lengthen debt maturity profile Note: (1) Certificates of Agribusiness Receivables 4 ( ² ) Brazilian Interbank Deposit Future

Reco ecord rd-hi high adj djuste usted EBI EBITDA, TDA, but but with wi th ope perati ration onal perfo erforman rmance be below low po poten tenti tial al, and and imp impacte acted by by non non- recurrin rring items Adjusted EBITDA LTM (R$ million) and Adjusted EBITDA Margin (%) 38.4% 36.1% 33.8% 32.7% 32.1% 3,333 2,895 2,452 2,169 2,057 Jun/15 Jun/14 Sep/14 Dec/14 Mar/15  2Q15 record-high adjusted EBITDA: R$959 million, margin of 40.2%  EBITDA around R$60 million below potential:  Longer maintenance downtime at Suzano Unit due to the start up of the new digester operation, with learning curve  Lower energy revenues  Adjustment of the long-term incentive plan and the allowance for doubtful debt 5

Stron ong pulp demand d support rted d impleme ementa ntati tion on of price e incre rease ase Pulp Production (‘000 tons ) Pulp Sales (‘000 tons) 3,351 3,226 2,982 2,850 804 805 755 696 LTM 1 LTM 1 2Q15 2014 2014 2Q14 2Q15 2014 2014 2Q14 Note: (1) last twelve months ended on 6/30/2015  2Q15 Production: +7% vs 2Q14 (+49k tons)  2Q15 Sales Volume: +16% vs 2Q14 (+109k tons)  Inventory reduction 6

Paper r demand nd in domestic stic market ket pressu ssured red by macro roeco economi omic c scenari ario Paper Production (‘000 tons) Paper Sales (‘000 tons) 1,322 1,301 1,282 1,261 319 310 330 305 LTM 1 LTM 1 2Q15 2014 2014 2Q14 2Q15 2014 2014 2Q14 Note: (1) last twelve months ended on 6/30/2015  Production decreased due to scheduled maintenance downtimes and learning curve of new digester at Suzano Unit  Lower domestic market sales volume: -6% vs 2Q14  Domestic market average net price:+5% vs 2Q14 and flat vs 1Q15 7

Despite ite the impact ct on cash cost t due to mainten tenan ance ce downtimes times and non-re recurring curring items. s... .. Cash Cost 1 1 (R$/ton) Cash Cost 1 1 (R$/ton) 626 17 12 22 591 594 27 (9) (5) 565 2Q14 2Q15 6M14 6M15 Wood Chemica icals ls FC FC Wood Chemica icals ls FC FC Note: (1) Ex-maintenance downtime  Wood cost increase  Advance purchase of third party wood to supply the Mucuri mill  Average distance increase at Maranhão mill  Lower revenue from energy sales  Price difference in energy submarkets in April and May  Lower energy generation at Mucuri due to the overhaul of the turbogenerator  Higher chemicals consumption upon resuming operations after downtimes 8

... ...Su Suza zano no conti tinu nues s to focus us on costs ts and and expenses nses discip iplin ine Adm. Expenses / Net Revenue LTM ¹ (%) Net Revenues LTM¹ (R$ million) 8,686 686 8,012 7,265 6.1% 1% 6,748 5.7% 6,289 289 5.4% 5.1% 4.8% 8% Jun/14 Sep/14 Jun/15 Dec/14 Mar/15 Jun/14 Sep/14 Dec/14 Jun/15 Mar/15 2.69 2.29 2.29 2.35 2.48 R$/US$ average TM ¹ (R$/ton) COGS LTM Sales Expenses / Net Revenue LTM TM 1 1 (%) 4.3% 3% 4.2% 1,328 328 1,293 4.1% 1,285 285 1,284 1,265 4.0% 0% 4.0% Jun/14 Sep/14 Dec/14 Mar/15 Jun/15 Jun/14 Sep/14 Dec/14 Mar/15 Jun/15 Note: (1) last twelve months 9

Investments estments in in retrofittin rofitting reduce ce structu uctura ral costs ts Capex (R$ million) 945 15 341 589 Sustai tain Retrofittin rofitting Others ers 6M15 Capex Capex  2015 estimated capex: between R$1.7 and R$1.8 billion  Additional retrofitting projects with high levels of return approved in 2Q15  Purchase of wood with returns much higher than cost of capital 10

Advance nce third rd party y wood purchases ses will allow forest st yield d increa ease se and wood mix to return rn to normal al levels s at Mucuri uri mill Cash Cost Ex Ex-Maintenance Downtime (R$/ton) 594 0 25 39 12 580 33 563 536 1 (17) (5) (57) 2013 2014 6M15 2012 Wood Chemicals FC Wood Chemicals FC Wood Chemicals FC  Cash Cost in the period: +R$ 31/ton (+5.5% vs inflation of +18.1%)  Wood cost: +R$84/ton  Other costs: -R$53/ton  Higher wood cost concentrated at Mucuri mill: 80% 267 267 298 298 70% 112 112 98 98 60% 62% 62% 50% 54% 54% 49% 49% 40% 45% 45% 2013 2014 6M15 2012 30% Third-party wood average distance at Mucuri (Km) Third party wood mix at Mucuri (%) 11

Lignin: Lignin : technologica cal l frontie tier r in the pulp industry stry  Replacement of petroleum-based chemicals for a renewable source  Main applications: Lignin gnin Fiber ber Cement Phenolic Rubber Additives Resins Components Lignin Production Process Energ ergy Lignin Reco cove very y Boil iler Lime Kiln ln Evaporati ration Chemicals Black Liquor Digeste ster Wood Wood Chip ips Bleach chin ing Pulp lp/ 12 Paper

Investment estment in Lignin: n: adjacency cency to extract ract higher r value e from m forestry estry assets ets  Capacity: 20k tons per year at Limeira  Suzano potential of approximately 185k 5k tons Estimated implementation time: 22 months hs  Estimated Capex: R$70 million ion   70% financed through innovation lines, at competit petitive ive costs  Attrac active tive return: : 3x higher than energy sales Lignin nin Equivalent uivalent Energy gy 1 ton 2 MWh 2 13

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