EARNINGS TELECONFERENCE 1st Quarter 2017 Highlights improvement - PowerPoint PPT Presentation

EARNINGS TELECONFERENCE 1st Quarter 2017

Highlights improvement in profitability vs. 1T16 Improved  Slightly more favorable scenario; Results  Harnessing of gains arising from our Internal Agenda. Working Lower investment in working capital  Extension of supplier payment lead times. Capital Announcement of price increase Wood  Panels |+8% to 15% | Implementation in March and April. Greater volumes shipped and leaner cost base. Announcement of price increase Deca  Entire Deca portfolio | +6% | Implementation in April. 2

Consolidated Result (in BRL million) 1Q17 1Q16 % Variance 4Q16 % Variance Net Income 952 901 5.6% 1,029 7.5% Wood Division 609 608 0.1% 692 -12.0% Deca Division 343 293 17.1% 337 1.9% EBITDA Adjust. & Rec. 148 106 39.4% 217 31.8% EBITDA margin Adjust. & Rec. 15.6% 11.8% - 21.1% - Net Profit (7) (30) 74.6% 25 -129.8% Recurring Net Profit (9) (30) 68.6% 6 243.5% ROIC 1.3% 0.1% - 3.6% - Participation in External Market Nominal reduction in G&A Expenses 20% 19% 16% 15% 10% 4% 4% Lower financial outlay 2012 2013 2014 2015 2016 1Q16 1Q17 3

Free Cash Flow In millions of BRL (in days) 1Q17 1Q16 4Q16 Maintenance & Projects Receipt Lead time 64 69 63 2017 T1 148 446 Stock lead time 94 98 94 2016 T1 106 Payment lead time 262 190 28 23 25 44 44 Cash cycle 130 144 132 30 29 2 - 2014 2015 2016 1Q16 1Q17 (8) (2) (31) Forest OPEX (42) (46) (99) (126) 191 178 (153) 162 55 42 Working Financial Free Cash Others EBITDA Capex Taxes Capital Result Flow 2014 2015 2016 1Q16 1Q17 Working Capital incorporated into the Duratex Management System; Mergers & Aquisitions Implementation of new S&OP model in both divisions; 152 116 93 Renegotiation of lead times with suppliers; 67 Investments restricted to sustaining operations; Land sales of around ~ R$ 2m. 4 2014 2015 2016 1Q16 1Q17

Indebtedness (in BRL million) 1Q17 1Q16 Variance R$ 4Q16 Variance R$ Short term debt 620 850 (230) 681 (61) Long term debt 2,634 2,048 585 2,776 (142) Total Indebtedness 3,254 2,898 356 3,457 (203) Availability 1,219 748 472 1,416 (197) Net Indebtedness 2,034 2,151 (116) 2,041 (6) Net Indebtedness / PL (in %) 44.5% 47.8% - 44.6% - Net Indebtedness / Ebitda Rec. UDM 2.81 2.95 - 2.99 - Amortization Schedule (BRL million) 3,254 Reduction of net indebtedness and of 1,219 leverage in the quarter; 816 628 720 620 470 Impact of the decrease in interest rates, reducing expenses; Gross 2020 2021 & Cash 2017 2018 2019 debt beyond Average timescale 3.3 years (1Q16: 3.0 years) 5

WOOD DIVISION

Panels Market in Brazil In millions of m³ Source: IBÁ Installed Capacity 1,4 2,7 3,2 3,7 4,0 4,6 4,9 5,2 5,4 1,3 18% 20% 21% 21% MDF 0,2 0,1 0,2 0,3 0,4 0,6 0,1 - - - 2,4 3,0 3,1 3,5 3,9 4,0 3,6 3,5 0,9 0,9 2009 2010 2011 2012 2013 2014 2015 2016 1Q16 1Q17 Domestic Market Demand Exports % Iddle Capacity Installed Capacity 1,1 2,6 3,2 3,4 3,6 3,8 4,0 4,0 4,4 1,0 40% 39% 35% 38% MDP - - - 0,1 0,2 0,3 0,1 0,3 - 0,1 2,4 2,9 3,0 3,2 3,2 3,0 2,5 2,5 0,6 0,6 2009 2010 2011 2012 2013 2014 2015 2016 1Q16 1Q17 7

Performance of the Wood Division Volume Shipped Net Income Recurring EBITDA (m³) (BRL m) (BRL m) 692 -2.5% 0.1% 29.7% 175 639 609 608 601 92 71 585 1Q17 4Q16 1Q16 4Q16 1Q17 1Q16 1Q16 4Q16 1Q17 Ebitda Gross 20.7% 20.2% 24.6% 15.0% 11.6% 25.3% Margin % Margin % Price base deteriorated since end of last year Utilization of With Ex Concentration on line maintenance during the Capacity Itapetininga Itapetininga quarter, resulting in tighter profit margins MDF 59% 78% MDP 53% 68% Sale of surplus forestry assets Wood Division 56% 71% Price increase in March ~15% 8

DECA DIVISION

Construction Materials Market Source: ABRAMAT ABRAMAT INDEX – DOMESTIC MARKET Measures revenue growth in the domestic market of the construction materials industry, relating performance to the same period the previous year. 11.9% 8.5% 5.1% 4.5% 4.0% 1.1% 0.7% -5.9% -6.3% - 6.3% -12.5% -11.5% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 1Q17 Abramat forecasts that the performance of the civil construction materials market in 2017 will be unchanged from 2016 10

Performance of the Deca Division Volume Shipped Net Income Recurring EBITDA (‘000 items) (BRL m) (BRLm) 25.5% 17.1% 58.5% 337 343 6,806 293 5,944 57 5,422 42 36 1Q17 4Q16 1Q17 1Q16 4Q16 1Q17 1Q16 1Q16 4Q16 Gross Ebitda 31.0% 26.4% 16.5% 12.2% 28.2% 12.4% Marin % Margin % Increase in Volumes Utilization of Capacity Strong performance from new launches Metals and 81% Showers Improvement in results triggered mainly by the Bathroom ware 62% capture of gains from the Duratex Management Deca Division 75% System 11

Expo Revestir We participated for the 15 th time as Master Sponsor of the Furnishing Exhibition, ( Expo Revestir ) in São Paulo, the largest construction and architecture fair in Brazil Once again our positioning centered on innovative products , displaying sustainable products and solutions which bring together design and technology. 12

Sustainability Strategy Working Conditions and People Development To have absenteeism level equal or lower than 1 for own employees and third parties Engagement of Clients & Consumers People To have 50% of the product portfolio developed using co-creation models models Relationship with Communities and Local Development 80% approval from the community of the engagement project 2025 Eco-efficiency To reduce the relative consumption of water by 10% To reduce relative landfill waste by 20% Climate Change To reduce absolute GEE Duratex emissions by 25% (scope 1) Processes Sustainable Management of Forests To reduce water consumption per hectare by 50% Responsible Supply Chain 100% strategic purchasing with socio-environmental criteria Sustainable materials and Solutions Products To develop 2 alternatives for renewable raw materials for Deca and Hydra Revenue of R$20 million from Pró-Água services & Services Deca portfolio to be 100% eco-efficient finished metals and basins New Exploratory Fronts Business 13

Message from the Management Focus on advancing the Internal Agenda, with initiatives relating to cost reduction, efficiency gains and growing working capital Investment restricted to sustaining the operations Liquidation of iddle assets Reduction of debt and deleveraging Consolidation of the journey of cultural transformation 14

Disclaimer & Glossary The information herein has been prepared by Duratex S.A. and does not represent any form of prospectus regarding the purchase or subscription to the company’s shares or securities. This material contains general information relating to Duratex and the markets the company operates in. No representation or guarantee, expressed or implied, is made herein, and no reliance should be placed on the accuracy, justification or completeness of the information provided. Duratex does not offer any assurances or guarantees regarding the fulfilment of expectations described. April, 2017 1) Recurring EBITDA: EBITDA adjusted for events not arising from the fluctuation in the fair value of biological assets, a combination of extraordinary business and events. 2) Recurring EBITDA UDM: Sum of Recurring EBITDA from the previous 12 months 14