Institutional Presentation 3Q17 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$ 20.2 billion Total Forest Base 1.2 million ha 32% Exports 68% Net Market Pulp Capacity² 3.6 million tonnes Domestic 36% Revenues Paper Capacity 1.3 million tonnes 64% Pulp R$ 9.9bn³ Adjusted EBITDA³ R$ 4,091 million Paper Net Debt R$ 9,283 million Net Debt/EBITDA 2.3x Pulp Paper Consumer Goods Market Pulp Printing & Writing Tissue Eucafluff (Coated and Uncoated) Paperboard Data from 09/30/2017 ¹ SUZB5: R$18.31 | 2 Excluding Fluff | 3 Last twelve months ended on 09/30/2017
Production Productio n Capacity Capacity Suzano is the second largest eucalyptus pulp producer and the fourth 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 - 1,650 - - - 60² - Mucuri 200 1,540 - 250 - 60 - Limeira 300 350 - 390 - - 20³ Suzano 460 70 100 360 200 - - Rio Verde - - - 50 - - - Total 960 3,610 100¹ 1,050¹ 200 120 20 ¹ Flexibility to produce either Fluff or Printing and Writing paper | ² Tissue start up: Imperatriz in 4Q17 | ³Lignin start up in 2018
Robu Robust Asset B st Asset Base Co ase Competitiveness mpetitiveness 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 : 734k ha Planted Area 2 : 256k ha 1 Average Structural Distance: 184 km States s of Bahia, , Espí pírito Santo and d Minas s Gerais T otal Area 1 : 270k ha Planted Area 2 : 190k 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 1,19 197 k h ha of tota tal l area ea Commercial Presence Productio ction Plan ants 579 k h 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 Struc Shareholder 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% 28% of Brazilian Stock Exchange (B3) Controlling Free Float Daily Trade Numbers Daily Financial Volume Treasury Shareholders 42% SUZB5 SUZB5 (R$ million) 1% 57% 65% Foreign / 35% National 12,296 62 11,812 59 52 9,840 3Q16 2Q17 3Q17 3Q16 2Q17 3Q17 Stock Performance- SUZB5 Base 100: (Sep/16 – Sep/17) SUZB5 +75% Ibovespa + 27% IBrX-50 +27% Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Source: Bloomberg
2. Industry 11
Pulp Industry Paper Consumption by Region Pulp Market is driven by paper consumption (%) Asia Europe 45% 23% Fiber Consumption (million tonnes) Latin America Total Fiber North 7% Other Consumption 1 America 6% 421 19% Virgin Fiber Recycled 181 241 Non-wood, Mechanical Pulp Market Pulp and Integrated Pulp 62 119 1 Excludes Dissolving Pulp and Fluff 12 Source: Poyry (2015), Hawkins Wright (Apr/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 3 Tissue 2030 Containerboard Packaging 2 Paperboard 1 Uncoated Uncoated (%p.a.) Mechanical Woodfree 0 Coated Other -1 Woodfree Average -2 growth of Coated -3 1.0% p.a. Mechanical Newsprint 20 40 60 80 100 Share on total fiber consumption in 2014 (%) Source: : Poyry (2015)
3. Competitiveness 14
Pulp Comp Pulp Competitiveness etitiveness Seven year cycle of the eucalyptus forest in Brazil and higher productivity ensures lower costs Cash Cost CIF / Europ ope (US$/tonne) Softwood wood Hardwoo ood 800 400 0 Brazil Indonesia East Europe Chile/Uruguay Iberia SwedenFinland Canada China US Chile East Europe Sweden Finland Other Europe US Coastal BC Japan Int. West Canada East Canada Other World Japan Other Asia Bel/France FX of R$3.12/US$ Source: Hawkins Wright (Aug/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: +2.6% p.a. | Other BHKP: +2.0% p.a. BEKP: +6.5% p.a. | Other BHKP: -1.6% p.a. 27 26 26 26 26 25 24 24 24 23 23 22 22 21 21 24 24 22 23 22 17 21 16 16 16 15 20 13 19 12 11 11 11 11 11 11 11 11 10 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 (Aug/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$2.4 billion Total of federal tax credits to be used: R$212 million Data accumulated up to 09/30/2017.
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, 19% by 2022 among other opportunities
Recommend
More recommend
