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Goldman Sachs – Basic Materials Conference May 2014
2
The information contained in this presentation may include statements which constitute forward-looking 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 forward-looking 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 forward-looking statements, which speak only for the date on which they are made.
Disclaimer
3
Company Overview 1 Pulp and Paper Market 2 Financial and Operational Highlights 3
Agenda
Final Remarks 4
4
Company Overview
5
A Winning Player
Port Terminal Pulp Unit
Três Lagoas
Santos
Aracruz Portocel
Caravelas
Belmonte Veracel
Jacareí
Superior Asset Combination Main Figures – 1Q14 LTM
Pulp capacity million tons 5.300
Net revenues R$ billion 7.1
Total Forest Base (1) thousand hectares 962
Planted area(1) thousand hectares 558
Net Debt R$ billion 7.0
Net Debt/EBITDA (in Dollars)(2) X 2.4
Net Debt/EBITDA (in Reais) X 2.4
Source: Fibria (1) Including 50% of Veracel, excluding forest partnership areas and excluding the forest base linked to the sale of forest assets in Southern Bahia State and Losango. (2) For covenants purposes, the Net Debt/EBITDA ratio is calculated in Dollars.
6
Fibria’s Units Industrial Capacity
* Veracel is a joint venture between Fibria (50%) and Stora Enso (50%) and the total capacity is 1,120 thousand ton/year
7
Worldwide presence
Strong global customer base
Long-term relationships
Focus on customers with stable business
Customized pulp products and services
Sound forestry and industrial R&D
Focus on less volatile end-use markets such as tissue
Efficient logistics set up
Low dependence on volatile markets such as China
Low credit risk
100% certified pulp (FSC and PEFC/Cerflor)
Sales Mix by End Use - Fibria
Sales Mix by Region - Fibria
Europe 39%
N. A. 28%
Asia 25%
Others 8%
LTM 1Q14
Tissue 53% P&W
29%
Specialty 18%
LTM 1Q14
Highlights
30% 20%
29% 29% 24% 18% 26% 26% 30%
22% 28% 31% 30% 19%
37% 46%
46% 41%
35% 44% 43% 41% 36%
42% 43% 35% 36%
46%
22% 25% 14% 20%
31% 28% 20% 23% 25% 26% 21% 26% 26% 26%
11% 9% 11% 10% 10% 10% 11% 10% 9% 10% 8% 8% 8% 9%
4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14
North America Europe Asia Others
Fibria’s Commercial Strategy
8
(1) Controlling group (2) Free Float 40.14% + Treasury 0.06%
Votorantim Industrial S.A.
(1) 29.42%
BNDES Participações
(1) 30.38%
Free Float (2)
40.20%
• Only 1 class of shares →100% voting 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
• SEC Registered with ADRs
• Indebtedness and liquidity
• Market risk management
• Risk management
• Corporate governance
• Information disclosure
• Stock trading
Fiscal Council
Board of Directors
20% independent
members
Role of CEO and
chairman is split
Innovation Committee
Statutory Audit
Committee
Finance Committee
Sustainability Committee
Personnel and Remuneration
Committee
General Meeting
Listed on Novo Mercado, highest CG level at BM&FBovespa: Policies approved by the Board of Directors:
Shareholder Structure and Corporate Governance
9
Fibria was elected as 1st place in the
pulp & paper sector in the corporate
governance and future's vision categories
Fibria is one of the 5 Brazilian companies
nominees to the Best Corporate
Governance
Award from London.
Company of the year,
among all industries,
according to Valor
Econômico.
Valor 1000
XVII ANEFAC-FIPECAFI - SERASA
EXPERIAN Prize
Fibria is among the most
transparent public companies
in Brazil, recognized for the
quality of its 2012 financial
statements.
Fibria was ranked for the forth
consecutive year (2010, 2011, 2012
and 2013).
In 2013 Fibria was ranked in four
categories: CEO, CFO, IR Team and IR
Professional
2013 Institutional Investor Latam Ranking -
P&P Sector
Fibria was selected as one of the 10 best
companies in
transparency.
The only one in
the pulp & paper
sector.
CDP Brasil 100 – Climate Change 2013
Report Época Negócios 360º
International Recognition by Corporate
Governance Report
Fibria was elected as 2nd place.
The prize highlights the
business profitability,
share profitability,
liquidity, corporate
governance and sustainability.
The Best Companies to the Shareholders
Prize of Capital Aberto Magazine
Fibria is the only Latin America company
selected by RobecoSAM (responsible for
DJSI) as one of the 10 worldwide leaders in
SRI magazine’s “The 10 Game Changers –
Changing the industry through
sustainability”.
RobecoSAM - Sustainability Investing
Magazine
Selected to Dow Jones World and
Emerging Markets Sustainability
Indices for 2013/14 as the industry
leader of Forestry Resources and
Paper sector.
DJSI World and DJSI Emerging Markets
Acknowledgments: Governance, Transparency, Profitability & Sustainability
10
Pulp and Paper Market
11
Today, according to public information, there will be a 11% increase of the pulp market capacity between 2014 and 2016
SOFTWOOD(1)
25.5 MT
HARDWOOD(1)
31.1 MT
MARKET PULP(1)
56.6 MT + =
2014-2016(3):
• New capacities: 6.0 mt • Announced Closures: (0.13) mt
Net: 5.9 mt
2014-2016(2): • New capacities: 0.7 mt
• Announced Closures: (0.35) mt
Net: 0.35 mt
2014-2016:
• New capacities: 6.7 mt • Announced Closures: (0.5) mt
Net: 6.2 mt
(1) Source: PPPC Special Research Note May 2014 – does not include Sulphite and UKP (2) Projects included: Paper Excellence (70kt); UPM Kymi (170kt); Klabin (200kt); Sodra Värö (275kt)| Closures: Birla AV Terrace Bay (350kt) (3) Projects included: Maranhão (1.5mt); Montes del Plata (1.3 mt); Oji Nantong (700kt); Eldorado (200kt); CMPC Guaíba II (1.3 mt); Klabin Ortigueira (1.0mt) | Closures: April Rizhao
(130kt)
12
844kt
196kt
-37kt
674kt
Total North America Western Europe China
+6% 2013 vs. 2012
+12%
+23%
-1% 400
500
600
700
800
900
1000
1100
0
50
100
150
200
250
jul-
08
ou
t-0
8
jan
-09
abr-
09
jul-
09
ou
t-0
9
jan
-10
abr-
10
jul-
10
ou
t-1
0
jan
-11
abr-
11
jul-
11
ou
t-1
1
jan
-12
abr-
12
jul-
12
ou
t-1
2
jan
-13
abr-
13
jul-
13
ou
t-1
3
jan
-14
abr-
14
Spread Avg. Spread BHKP NBSK
Global Pulp Market Demand
Demand growth rate Hardwood (BHKP) vs. Softwood (BSKP) (000 ton)
Hardwood demand will continue to increase at a faster pace than Softwood
Source: PPPC Source: PPPC
(1) Source: PPPC World 20 – December/2013
Shipments of Eucalyptus Pulp (1) NBSK vs. BHKP - Prices(1)
(1) Source: FOEX
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
Hardwood Softwood
2013 - 2018 CAGR: Hardwood: +2.8% Softwood: +0.7%
000 ton 1998 2008 2018
Growth
1998-
2008
Growth
2008-
2018
Hardwood 15.0 24.5 32.8 63% 34%
Eucalyptus 6.0 14.2 23.2 137% 63%
Softwood 17.6 21.6 24.8 23% 15%
Market Pulp 32.6 46.1 57.1
13
Supply structural changes puts pressure on the industry
MARKET PULP CAPACITY RANKING 2013 (000T) MAIN PROJECTS
Project Country Capacity Timing Fiber Status
Arauco / Stora Uruguay 1.3Mt 1Q2014 BEKP Confirmed
CMPC Guaíba II Brazil 1.3 Mt 2Q2015 BEKP Confirmed
Klabin Paraná Brazil 1.5 Mt 2Q2016 BEKP/
BSKP/Fluff Confirmed
APP South Sumatra Indonesia 2.0 Mt 4Q2016 BHKP Confirmed
Fibria Três Lagoas II Brazil 1.75 Mt - BEKP Unconfirmed
COST CURVE EVOLUTION
USD
/Ad
t, 2
01
3 c
ost
leve
l
Cumulative Capacity Million t/a
Cost position of marginal
producer
Source: Hawkins Wright , Poyry and Fibria Analysis
0 2000 4000 6000
Canfor
ENCE
Eldorado
Resolute Forest
Domtar
Mercer
Ilim
IP
Weyerhaeuser
Sodra
Stora Enso
Suzano
Metsa Group
Paper Excellence
UPM-Kymmene
Georgia Pacific
CMPC
Arauco
APRIL
Fibria
Bleached Softwood Kraft Pulp (BSKP)
Bleached Hardwood Kraft Pulp (BHKP)
Unbleached Kraft Pulp (UKP)
Mechanical
14
Source: Hawkins Wright , Poyry and Fibria Analysis
Gross capacity addition should not be counted as the only factor influencing pulp price volatility
BH
KP
pri
ces
- ci
f Eu
rop
e (U
S$/t
on
)
Gre
enfi
eld
cap
acit
y (0
00
to
n)
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
0
100
200
300
400
500
600
700
800
900
1,000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Valdivia
APP Hainan
Veracel Nueva Aldea
Santa Fé
Mucuri
Fray Bentos
Kerinci PL3
Três Lagoas
Rizhao
APP Guangxi
Chenming Zhanjiang
Eldorado Montes del
Plata
Maranhão
Guaíba II
15
Capacity closures DO happen…
-910
-85
-1,260
-1,180
-540 -500
-105
-1,085
-130
-1400
-1200
-1000
-800
-600
-400
-200
0
2006 2007 2008 2009 2010 2011 2012 2013 2014-2015
Source: PPPC and Fibria
Closures of Hardwood Capacity Worldwide 000 ton
16
Technical Age and Scale in the Market Pulp Industry Further closures are expected due to lack of adequate investments in the industry…
Hardwood (BHKP) Market Pulp Softwood (BSKP) Market Pulp
0
500
1,000
1,500
2,000
2,500
3,000
0 5 10 15 20 25 30
PM Capacity, 1000 t/a
Technical Age, years
STRONG
2013/IQ
Weighted average
technical age 14.2 years
Weighted average
capacity 1184 000 t/a
Aracruz
Três Lagoas
Veracel
Jacareí
0
500
1,000
1,500
2,000
2,500
3,000
0 5 10 15 20 25 30
PM Capacity, 1000 t/a
Technical Age, years
WEAK
STRONG Weighted average
technical age 21.2 years
Weighted average
capacity 503 000 t/a
2013/IQ
North American Pulp Mills Other Pulp Mills Closures Grade Switch On & Off
WEAK
17
… and when other expenses are plugged, we see no one but Fibria is generating positive free cash flow in the industry
Total Cash Cost of BHKP
delivered to Europe
(US$/t)
528 493 502 453 479 464 388 406 426
316 304 306 286 261 229
48 40
71 70 47 42
112 36 42
50 41 45 56 67 68
57
113
44
Cash Cost (US$/t) Delivery (US$/t)
Source: Hawkins Wright (Outlook for Market Pulp, March2014) | Fibria’s 1Q14 LTM considering a FX of R$/US$2.25.
519
SG&A Others
CAPEX
Interest
Working Capital = +11
Capacity (k tons): 660 595 1,775 585 565 355 1,005 2,410 1,960 1,095 12,750 = 31,930 330 3,680 4,165
FOEX
Net price
809
18
China: Paper capacities expansion continues to go on
China corresponds to 2/3 of global tissue capacity expansion
Ktons 2013 2014E 2015E Total
P&W (woodfree) 385 150 576 1,111
Tissue 1,029 1,831 471 3,331
Cartonboard 2,128 1,650 180 3,958
Total 3,542 3,631 1,227 8,400
19
World Tissue Consumption, 1991-2013 (3)
Per Capita Consumption of Tissue by World Region (3) China's Share of Market Pulp (2)
24
15 15
12
7 6 5
1
0
5
10
15
20
25
30
N. America
West Europe
Japan Oceania East Europe
LatAm China Africa
9 11 13 16
26
17 21 20
23
7 9 10
12
22
16 20 19
21 10
10 12
14
21
17
22 23
23
0
2,000
4,000
6,000
8,000
10,000
12,000
2005 2006 2007 2008 2009 2010 2011 2012 2013
Eucaplyptus Hardwood Total
1,889
760 556
439
60 53 21
1,922
805
516 525
57 10 9 0
500
1,000
1,500
2,000
2,500
BHKP Total
Latin America
Others* Indonesia USA Canada Western Europe
1Q2013
1Q2014
Latin America is the leading exporter of BHKP to China, accounting to approximately 42% of China's total imports in 1Q2014.
(Kg/capita/year)
(million t) (‘000s t) (kg/person/year)
Between 2005 and 2013, the Chinese market share of eucalyptus shipments increased by 14 p.p. (total market pulp: + p.p.)
* includes Russia, China, Thailand and New Zealand
0
5
10
15
20
25
30
35
1991 1996 2001 2006 2009 2010 2011 2012 2013 N.America W.Europe E.Europe L.America Middle East Japan China Asia FE Oceania Africa
LTM Growth Rate +4.2%
Benefiting From China’s Growth
China’s Hardwood Imports of BHKP by Country (1)
(1) PPPC – Pulp China (2) PPPC – W20. Coverage for chemical market pulp is 80% of world capacity (3) RISI
(In percentage)
20
Internal Consumption and Urbanization
China’s private consumption vs. exports (CNY trillion and annual % change) (1)
Chinese Urbanization Driver of Long-Term Growth
(UN Population Projections, Millions)(2)
Sources: (1) the Economist. (2) RISI China Pulp Market Study.
Shift from exports to private consumption;
Positive effects on households income and rising standards of living.
21
Financial and Operational Highlights
22
The maturity of synergies captured since Fibria’s creation improved its operating indicators…
+15%
4,600
5,054 5,184
5,299 5,271 5,272
2009* 2010* 2011 2012 2013 1Q14 LTM
PRODUCTION VOLUME (000 t) BEST PRACTICES AND OPERATING STABILITY
Historical Value Inflation Effect**
-21%
CASH COST (R$/ton)
Historical Value Inflation Effect**
-17%
SG&A (R$ million) STRUCTURE AND PROCESS SIMPLIFICATION
1,522
2,526
1,964 2,253
2,796 2,910
2009* 2010* 2011 2012 2013 1Q14 LTM
29%
40% 34% 36%
40% 41%
EBITDA (R$ million) - EBITDA MARGIN (%)
* Excludes Conpacel | ** IPCA index considered to calculate the inflation effect
432 448 471 473 505 515
656 624 596 549 545
2009* 2010* 2011 2012 2013 1Q14 LTM
593 593 605 584 648 659
900 826
766 678 699
2009* 2010* 2011 2012 2013 1Q14 LTM
23
Net Debt (Million)
1,475
1,484
2,959
1,288
777 773
1,386 1,230
943 650
1,367
26 5
1,356
Liquidity 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Pre-payment BNDES NCE ACC/ACE/Other Voto IV Bond Pro Forma
(cash)
(revolving)
3.1 2.8 2.4
3.1 2.6 2.4
9,898 9,773 8,445
4,915 4,172 3,732
Mar/13 Dec/13 Mar/14
R$ US$
7,516 7,849 6,969
3,732 3,351 3,080
Mar/13 Dec/13 Mar/14
R$ US$
Net Debt/EBITDA (US$) Net Debt/EBITDA (R$)
- 24%
Debt Amortization Schedule (R$ million)
- 11%
Indebtedness
Gross Debt (Million)
24
Fibria delivered the most significant leverage reduction in the LTM
Net Debt/EBITDA (x)(1)
7.2
6.3
5.6
4.7
3.9 3.6
2.9
3.2
4.2 4.8
5.2
4.7 4.5
3.4
3.1
3.3 3
2.8 2.4
2.5
2.0
3.3 3.0
4.2
4.8
4.8
5.7
4.7 5.0 5.0 5.1 5.1 5.2
4.8
2.2
2.2 2.1 2.0
2.4
2.5
2.3 2.5
2.3 2.4 2.2
2.4 2.4 2.6
1.7
1.1
1.9 1.8 1.9
2.0 2.3 2.5
2.8 2.9 3.3
3.4
2.9 3.0 2.8
2.9
1.7
1.4 1.6 1.8
2.7
2.2
2.7
3.4 4.1
4.6 4.3
3.7 3.1
3.8
Sep/09 Dec/09 Mar/10 Jun/10 Sep/10 Dec/10 Mar/11 Jun/11 Sep/11 Dec/11 Mar/12 Jun/12 Sep/12 Dec/12 Mar/13 Jun/13 Sep/13 Dec/13 Mar/14
Fibria Arauco¹ CMPC Klabin Suzano
S&P BB+/Positive BBB-/Stable BBB-/Stable BBB-/Stable BB/Negative
Moody’s Ba1/Positive Baa3/Negative Baa3/Negative - Ba2/Stable
Fitch BBB-/Stable BBB/Stable BBB+/Stable BBB-/Stable BB-/Positive
(1) Fibria’s historical data in BRL.
Ratings
25
Liquidity Events: delivered as promised
1,361
5,715
1,045
850
836
1,403
1,268
1,851
1,625
EQUITY OFFERING FOREST SALE 2012 (1) FCF 2012 LAND DEAL FCF 2013 TOTAL
4.8 5.2 4.7 4.5 3.4 3.1 3.3 3.0 2.8 2.4
Dec/11 Mar/12 Jun/12 Sep/12 Dec/12 Mar/13 Jun/13 Sep/13 Dec/13 Mar/14
Net Debt/EBITDA (x) R$
(1) Losango and forestry assets and land in the south of Bahia State
2012 Bond prepayment
2013 Bond prepayment
Available
Sources (R$ Million) Uses (R$ Million)
2014 Bond prepayment
REFIS
26
Interest expense and cost on foreign currency debt
Fonte: Fibria e Bloomberg
143
126
133 137
123 125 123 122 126
120
134
120 117
109
94 93 87 85
4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14
6.3
6.8
6.0 6.0 5.9
6.3
5.8 5.5 5.5 5.5 5.4
5.2 5.2 5.2
4.7 4.5 4.6
4.1
4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14
27
Fibria 2024 – New Bond Issuance
Principal: US$ 600 millon
Issuance Date: May/2014
Coupon: 5.25% a.a.
Bookbuilding: 11.5x
Spread over T10Y: 275.0 bps
Issuance
US$ 600 million
Highlights
- SEC registered
- IG document
- Increased Debt profiles
- Fibria 2021 Early redemption equals to 78% of the total
Fibria 2024
- For liability management purposes only
- Savings of US$ 5.5 MM in interest per year
28
560
214 (258)
(99)
25
(6) (8)
Adjusted EBITDA Capex Net Interest Working Capital
IR/CS Other Free Cash Flow
Fibria delivers one of the highest EBITDA/t and FCF/t of the industry
(1) Does not include: the capital gain on assets sales, Bonds repurchases and the tax payment (REFIS) over profit earnings abroad
2,910
1,111
(1,340)
(516)
132 (30) (45)
Adjusted EBITDA Capex Net Interest Working Capital
IR/CS Other Free Cash Flow
Free cash flow generation(1) - 1Q14 LTM (R$ Million)
Free Cash Flow per ton - 1Q14 LTM (R$/ton)
29
2.00 1.76 1.67
1.95 2.16
2.25
562
844 810 751 791
787
FX and Pulp Price explain 80% of Fibria’s EBITDA Margin
Average Price FOEX (US$/t)
Exchange Rate Average (R$/US$)
EBITDA Margin
EBITDA (R$ million)
29%
40%
34% 36% 40%
41%
1,522
2,526
1,964 2,253
2,796 2,910
2009 (1) 2010 (1) 2011 (1) 2012 2013 1Q14 LTM
(1) Excludes Conpacel
30
Maintenance CAPEX (R$ Million)
1,416
1,078
1,287
1,520
2011 2012 2013 Land Deal:
Rural
Partnership
Non recurring
wood
purchase
Inflation FX Rate Modernization Others 2014E
Approx.
18% increase
Cash Production Cost saw an increase of 17% over the past 5 years
Cash Production Cost (1) (R$/ton)
432 448
471 473
505
2009 (2) 2010 (2) 2011 2012 2013
CAGR: + 4% 2014 Cash Production Cost:
• Wood costs will represent the main impact
• Non recurring increase mainly due to third party wood
• Operating excellence actions focused on keeping cash cost below inflation
• In 2015 the wood impact will be structurally eliminated
(1) Excludes Conpacel
Target to have the cash cost increase below inflation
31
32
Final Remarks
33
PULP
- Growth with discipline
- Best portfolio of projects
BIO-ENERGY
- Complementary to pulp
- Ensyn
INDUSTRY
CONSOLIDATION ?
OTHER OPPORTUNITIES
- Portocel
- Land and forest
Potential Growth
Prospects
Fibria is seeking value creation for its shareholders with capital discipline
34
Key Highlights
Sound credit profile, with decreasing leverage ratios
Market leader with a highly profitable operation and cash cost below industry average
Highly experienced and qualified management team
Highly recognized and awarded by industry specialists
35
Back up
36
Hedge
Hedging Strategy
• Debt Hedge:
- Swap operations (currency and rate)
- Maturity aligned with original debt
- No margin call
• Operating Hedge:
- Net FX exposure protection in US$ in up to 18 months
- Current strategy: Zero Cost Collar
- No leverage
- No margin call
- 03/31/2014 data:
- Notional: US$ 932 million
- 41% of protected net exposure
- Maturity: up to 12 months
• All Fibria operations are registered at CETIP
Governance
• Hedging Policy approved by the Board of Directors and available at the Investor Relations website.
• Periodical follow up of the hedge portfolio by the Finance Committee
• Maximum % of exposed operational flow is defined according to the FX risk management policy.
• Governance, Risk and Compliance (GRC) Team:
- Report to CEO
- Responsible for monitoring policies compliance
- Independent from Treasury
ZeroCostCollar x NDF – Payoff
37
Fibria’s tax structure
Tax benefits (R$)
Fiscal - annual adjustment
Benefit Amount Maturity
Goodwill
(Aracruz
acquisition)
Annual tax deduction:
~R$89 million (tax)
Remaining Balance Dec./13:
R$1.29 billion (base)
2018
Forestry Capex in
Mato Grosso do
Sul state
2014’s tax deduction related
to depletion: R$ 5,5 million
(tax)
Undefined
Tax loss carry forward and tax credits
Benefit Amount
Tax loss
carryforward
Balance up to Mar./14:
R$631 million (base)
Accumulated tax
credits
Balance Mar./2014:
-PIS/COFINS: R$533 million
- withholding tax (IR and CSLL):
R$231 million
Actual tax payment (cash basis)
2009 2010 2011 2012 2013
R$7 million R$16 million R$4 million R$15 million R$31 million
38
Due to productivity gains in its forests, Fibria had the opportunity to explore this new ownership model
MAI* Pulp: (adt/ha/year)
10.6 10.9
12.1
15.0 15.0 15.0 15.0 15.0
2010 2015 2020 2025 2030 2035 2040 2045
FIBRIA’S GAINS IN IMACEL DUE TO INVESTMENTS IN BIOTECHNOLOGY (TONS OF PULP/HA/YEAR)
2012 field trials = 11.9
Conservative assumption
*MAI: Mean annual increment
Actions: • Genetic improvement • Excellence in forestry management • Superior industrial efficiency
39
Leadership position
(1) Fiber Consumption, Recycled Fiber and Pulp: RISI | Market Pulp, Hardwood and Eucalyptus: PPPC Special Research Note - May 2014
Recycled Fiber 234 million t
49% 51%
60%
18% 82%
58% 42%
40%
35% 65%
29% 71%
Fiber Consumption 403 million t
Pulp 169 million t
Chemical 139 million t
Mechanical 31 million t
Integrated Mills 84 million t
Market Pulp 56 million t
Hardwood 29 million t
Other Eucalyptus Pulp producers:
13 million t
Softwood/Other 27 million t
Acacia/Other 10 million t
Eucalyptus 19 million t
Industry Outlook(1)
40
Global Paper Consumption
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Developed Markets Emerging Markets
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Developed Markets Emerging Markets
CAGR 1996 – 2006 Developed Markets: + 1.7% Emerging Markets : + 6.0%
85,291
117,611
15,548
37,474
P&W Consumption (000 tons)(1)
Tissue Consumption (000 tons)(1)
114,507
CAGR 2007 – 2016 Developed Markets: - 4.0% Emerging Markets : + 4.1%
CAGR 1996 – 2006 Developed Markets: + 2.4% Emerging Markets : + 6.9%
CAGR 2007 – 2016 Developed Markets: + 1.4% Emerging Markets : + 6.7%
26,877
Source: RISI
41
Cash Production Cost – 1Q14
507 466
549
1Q13 4Q13 1Q14
Cash Production Cost (R$/t)
463 466
524
1Q13 4Q13 1Q14
Cash Production Cost ex-downtimes
(R$/t)
1Q14 vs. 1Q13:
- Higher transportation costs
- Exchange rate
- Higher fixed costs
- Higher input consumption
- Third party wood (1Q13: 9% I 1Q13: 11%)
Management initiatives seeking to maintain the cash cost increase below the inflation.