Institutional Presentation 4Q17 1
Disclaimer The statements in this presentation constitute forward-looking statements. Such statements are subject to known and unknown risks and uncertainties that could cause the Company’s actual results to differ materially from those set forth in the forward- looking statements. These risks include changes in customer demand for the Company’s products, changes in raw material costs, seasonal fluctuations in customer orders, pricing actions by competitors, significant changes in the applicable rates of exchange of the Brazilian real against the US dollar, and general changes in the economic environment in Brazil, emerging markets or internationally.
Agenda Agenda 1. Overview 2. Industry 3. Competitiveness 4. Strategy 5. Operating and Financial Highlights 3
1. Overview 4
Suzano Suzano With over 90 years of operations, the Company produces pulp, paper and tissue Market Cap¹ R$ 20.7 billion 30% Total Forest Base 1.2 million ha Exports 70% Net Market Pulp Capacity² 3.6 million tonnes 34% Domestic Revenues Paper Capacity 1.2 million tonnes 66% Pulp R$ 10.5bn³ Adjusted EBITDA³ R$ 4,615 million Paper Net Debt R$ 9,484 million Net Debt/EBITDA 2.1x Pulp Paper Consumer Goods Market Pulp Printing & Writing Tissue Eucafluff (Coated and Uncoated) Paperboard Data from 12/31/2017 ¹ SUZB3: R$18.69 | 2 Excluding Fluff | 3 Last twelve months ended on 12/31/2017
Productio Production n Capacity Capacity Suzano is the second largest eucalyptus pulp producer and the fifth largest market pulp producer in the world. Suzano has also a leading position in the Paperboard and Printing & Writing segments in Brazil. Consumer Adjacent Pulp Paper Goods Business Unit Capacity (‘000 ton) Market Printing & Integrated Fluff Tissue Lignin Paperboard Pulp Writing Imperatriz 60 1.590 - - - 60 - Mucuri 200 1.480 - 250 - 60 - Limeira 290 400 - 400 - - 20² Suzano 450 70 100¹ 350¹ 200 - - Rio Verde - - - 50 - - - Total 1.000 3.540 100¹ 1.050¹ 200 120 20 ¹ Flexibility to produce either Fluff or Printing and Writing paper | ² Lignin start up in 2018
Robust Rob ust Asset Asset Base Base Comp Competiti etitiveness veness Suzano’s forestry competitiveness allows its operation in different regions with adequate yields Forest Areas States s of Maranhão, o, Pará, , T ocantins s and d Piauí T otal Area 1 : 730k ha Planted Area 2 : 258k ha 1 Average Structural Distance: 184 km States s of Bahia, , Espí pírito Santo and d Minas s Gerais T otal Area 1 : 279k ha Planted Area 2 : 196k ha 2 Average Structural Distance: 74 km State of São Paulo Port T otal Area 1 : 193k ha Distribution Center Planted Area 2 : 132k ha Commercial Office 3 4 Average Structural Distance: 190 km Forest Assets 5 1,203k 3k ha of tota tal l area ea Commercial Presence Productio ction Plan ants 587k ha Imperatriz (State of Maranhão) 15 states in Brazil: 1 of plan anted ted area ea • 8 Regional Commercial Offices Mucuri (State of Bahia) 2 • 4 Regional Distribution Centers • 16 Local Distribution Centers Rio Verde (State of São Paulo) 3 Plus commercial offices in USA, China, UK, Switzerland and Argentina. Suzano (State of São Paulo) 4 Cerflor Limeira (State of São Paulo) 5 ¹ Consider own and leased area ² Consider own, leased and third-parties areas
Corporate Governa Corporate Governance nce Members of the Board are well-known in the Brazilian Corporate landscape and are supported by the committees on the decision making Board of Directors Nine members, five Sustainability Management independent and Strategy Audit Committee Committee Committee David Feffer President Dependent Claudio Thomaz Lobo Sonder Vice President Dependent Daniel Feffer Vice President Dependent Jorge Feffer Board Member Dependent Antonio de Souza Corrêa Meyer Board Member Independent Marco Antonio Bologna Board Member Independent Maria Priscilla Rodini Vanzetti Machado Board Member Independent Nildemar Secches Board Member Independent Rodrigo Kede de Freitas Lima Board Member Independent
Novo Novo Mercado Mercado Liquidity gains contribute even more to position Suzano as protagonist in the reshaping of the industry in the long term Equal political and Non-premium economic rights: migration reinforces 1 share = 1 vote the commitment of and 100% tag along controlling shareholders to the capital market and other stakeholders Creates conditions to continue improving and innovating Liquidity gains contribute even more to Materialization of position Suzano as the commitment to protagonist in the reshaping of the cultivate the highest industry in the long term governance standards Note: Novo Mercado is the highest corporate governance segment of the Brazilian Stock Exchange (B3).
Shareholder Shareholder Struc Structure ture and and Stock Performance Stock Performance As of November, the Company's shares became part of the BNDES Mondrian Other Novo Mercado, the highest level of corporate governance 7% 7% 29% of Brazilian Stock Exchange (B3) Controlling Free Float Daily Trade Numbers Daily Financial Volume Treasury Shareholders 43% SUZB3 SUZB3 (R$ million) 1% 56% 65% Foreign / 35% National 71 12,034 62 11,441 50 9,840 4Q16 3Q17 4Q17 4Q16 3Q17 4Q17 Stock Performance- SUZB3 Base 100: (Dec/16 – Dec/17) SUZB3 +32% Ibovespa + 27% IBrX-50 +27% Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Source: Bloomberg
2. Industry 11
Pulp Industry Paper Consumption by Region Pulp Market is driven by paper consumption (%) Asia Europe 46% 22% Fiber Consumption (million tonnes) Latin America Total Fiber North 7% Other Consumption 1 America 6% 427 18% Virgin Fiber Recycled 182 245 Non-wood, Mechanical Pulp Market Pulp and Integrated Pulp 64 118 1 Excludes Dissolving Pulp and Fluff 12 Source: Poyry (2017), Hawkins Wright (Dec/2017) and internal analysis
Paper Paper Demand Demand Demand for pulp driven by tissue and paperboard consumption Estimated paper demand: 4 490MM/ton in Estimated demand growth until 2030 Tissue 3 2030 Paperboard Containerboard 2 1 Packaging Uncoated Uncoated Other (%p.a.) Mechanical Woodfree 0 -1 Coated Woodfree Average -2 growth of Coated -3 1.3% p.a. Mechanical Newsprint 20 40 60 80 100 Share on total fiber consumption in 2016 (%) Source: : Poyry (2017)
3. Competitiveness 14
Pulp Compe Pulp Competiti titivene veness ss Seven year cycle of the eucalyptus forest in Brazil and higher productivity ensures lower costs Cash Cost CIF / Europ ope (US$/tonne) Softwoo wood Hardwoo ood 800 400 0 Brazil Indonesia Chile/Uruguay East Europe Iberia Finland Canada China JapanUS Chile East Europe Sweden Other World Finland Other Europe US Coastal BC Int. West Canada Japan East Canada East Canada Sweden Bel/France Other Asia FX of R$3.28/US$ Source: Hawkins Wright (Dec/17)
Pulp Competitiveness Pulp Competitiveness The competitiveness of the eucalyptus fiber leads to the growth compared to other fibers Fiber volume (million tonnes) CAGR GR CAGR GR BEKP: +2.3% p.a. | Other BHKP: +2.2% p.a. BEKP: +6.5% p.a. | Other BHKP: -1.6% p.a. 27 27 26 26 26 25 24 24 24 23 23 22 22 21 21 24 22 23 23 22 17 21 16 16 16 15 20 13 19 12 11 11 11 11 11 11 11 11 11 10 10 10 10 10 9 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017e 2018e 2019e 2020e BEKP¹ Other BHKP² BSKP³ Source: Hawkins Wright (Dec/17) 1 Bleached Eucalyptus Kraft Pulp | 2 Bleached Hardwood Kraft Pulp | 3 Bleached Softwood Kraft Pulp
Paper Paper Competitiveness Competitiveness Suzano is an integrated paper producer, which leads to a higher Paper Market is contrib ibuti ution on margi gin n per ton less volatile Paper Margin Inputs and Variable Costs Leadership position in Integrated Pulp Paperboard Leadership Margin Segment position in Printing & Pulp Cost Writing Segment in Brazil
Federal Federal Taxes Competi Taxes Competitiv tiveness eness Suzano's assets leads to a fiscal situation which allows low cash disbursement for income and social contribution taxes Tax Benefits 75% of income tax reduction: Maranhão unit until 2024 • Bahia unit: Line 1 until 2024 | Line 2 until 2018 • Tax Credits Tax loss carry forward: R$2.3 billion Total of federal tax credits to be used: R$190 million Data accumulated up to 12/31/2017.
4. Strategy 19
Strategy to maximize the return on invested capital Structural Adjacent Reshaping of Competitiveness Business the Industry o Anticipated return o Investments in adjacent o Transformational changes in improvement as result of businesses such as the industry should lead to cost reduction initiatives FuturaGene (biotech), Fluff, higher returns coupled with disciplined Lignin and Tissue, leveraging o Suzano uniquely positioned investments to achieve on Company’s current to have an active role with optimal cost capabilities, to improve its vertically integrated margins by offering high- o Investment in retrofitting operation, stablished value added products and debottlenecking should commercial relationships reduce cash costs per ton by and consolidation capacity, 21% by 2022 among other opportunities
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