Académique Documents
Professionnel Documents
Culture Documents
January, 2015
FIBRIA APP WITH THIS PRESENTATION IS AVAILABLE FOR DOWNLOAD AT APPLE STORE AND GOOGLE PLAY.
Disclaimer
1
2 Pulp and Paper Market
3 Financial and Operational Highlights
4
Company Overview
Final Remarks
Agenda
Company Overview
4
A Winning Player
Superior Asset Combination
Belmonte
Veracel
Caravelas
Portocel
Aracruz
Trs Lagoas
Pulp capacity
million tons
5,300
Net revenues
R$ billion
7.0
thousand hectares
970
Planted area(1)
thousand hectares
562
R$ billion
7.3
2.5
2.7
Net Debt
Jacare
Santos
Port Terminal
Pulp Unit
Source: Fibria
(1) Including 50% of Veracel, excluding forest partnership areas and forest bases linked to the sales of Losango and forest assets in Southern Bahia State.
(2) For covenants purposes, the Net Debt/EBITDA ratio is calculated in Dollars.
* Veracel is a joint venture between Fibria (50%) and Stora Enso (50%) and the total capacity is 1,120 thousand ton/year
Highlights
Region - 3Q14
N.
America
26%
Tissue
55%
Printing &
Writing
27%
Europe
39%
Asia
25%
Specialty
18%
Other
10%
9%
22% 25%
14% 20%
37%
46% 41%
30%
46%
20%
9%
10%
8%
8%
8%
9%
9%
10%
20% 23% 25% 26% 21% 26% 26% 26% 27% 25%
31% 28%
35% 44%
42%
Worldwide presence
Long-term relationships
39%
46% 42%
4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14
North America
Europe
Asia
Other
Votorantim
Industrial S.A.
(1)
29.42%
BNDES
Participaes (1)
30.38%
Free
Float (2)
General
Meeting
40.20%
Fiscal
Council
Board of
Directors
20% independent
members
Role of CEO and
chairman is split
Finance
Committee
Statutory
Audit
Committee
Personnel and
Remuneration
Committee
Sustainability
Committee
Innovation
Committee
30%
independent
members
100%
independent
members
50% independent
members
45% independent
members
Anti-Corruption
Information Disclosure
Securities Trading
SOFTWOOD(1)
25.5 MT
2014-2016(2):
HARDWOOD(1)
31.1 MT
2014-2016(3):
MARKET PULP(1)
56.6 MT
2014-2016:
Net: 5.2 mt
Net: 5.5 mt
Net: 0.3 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 Vr (275kt)| Closures: Birla AV Terrace Bay (350kt)
(3) Projects included: Maranho (1.5mt); Montes del Plata (1.3 mt); Oji Nantong (700kt); Eldorado (200kt); CMPC Guaba II (1.3 mt); Klabin Ortigueira (1.0mt) | Closures: April Rizhao
(130kt); Arauco Valdivia (300kt); Ence Huelva (400 kt).
10
35.000
30.000
25.000
20.000
15.000
10.000
5.000
Hardwood
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
Softwood
Source: PPPC
1998
15.0
2008
24.5
2018
32.8
Growth
19982008
63%
Growth
20082018
250
34%
150
200
6.0
14.2
23.4
137%
800
17.6
21.6
24.8
Market Pulp
32.6
46.1
57.1
23%
63%
15%
600
500
400
Spread
Source: PPPC. Excludes Sulphite and UKP market pulp.
700
Average spread:
US$ 114
50
Softwood
1000
900
100
Eucalyptus
1100
Spread Dec./14:
US$ 191
(1)
Average spread
BHKP
NBSK
11
MAIN PROJECTS
Project
Fibria
APRIL
Arauco
Suzano
CMPC
UPM-Kymmene
Georgia Pacific
Paper Excellence
Metsa Group
Stora Enso
Weyerhaeuser
Ilim
Eldorado
Mercer
Domtar
IP
Sodra
Resolute Forest
Canfor
ENCE
Country
Capacity
Timing
Fiber
Status
CMPC Guaba II
Brazil
1.3 Mt
2Q2015
BEKP
Confirmed
Klabin Paran
Brazil
1.5 Mt
2Q2016
BEKP/
BSKP/Fluff
Confirmed
Indonesia
2.0 Mt
1Q2017
BHKP
Confirmed
Brazil
1.75 Mt
BEKP
Unconfirmed
2000
4000
6000
Cost position
of marginal
producer
12
1.000
900
1,8
1,6
Rizhao
Maranho
Trs
Lagoas
700
APP
Hainan
600
500
400
Eldorado
Fray
Bentos
Mucuri
Veracel Nueva Aldea
Santa F
Valdivia
1,4
Montes
del Plata Guaba II
1,2
Klabin
1,0
Chenming
Zhanjiang
Kerinci
PL3
800
2,0
0,8
APP Guangxi
300
0,6
Oji
Nantong
200
0,4
100
0,2
0,0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
(1) Source: Hawkins Wright , Poyry and Fibria Analysis. Pulp price estimates according to Hawkins Wright (Sep/14), Brian McClay (Nov/14) and RISI (Nov/14)
(2) Partially integrated production
13
3.000
Weighted average
technical age 12.3 years
STRONG
2.500
STRONG
2.500
Aracruz
2.000
1.500
2.000
Weighted average
capacity 1,277,000 t/a
Trs Lagoas
1.500
Jacare
1.000
Veracel
1.000
Weighted average
capacity 527,000 t/a
Ence
Huelva
500
500
Old
Town
0
30
WEAK
20
10
0
30
WEAK
25
Closures
20
15
10
Technical Age, years
Grade Switch
On & Off
More than 7.7 million tons of capacity above 25 years and with annual capacity below 500,000 t/y.
14
-105
-540
-500
-830
-910
-1,085
-1,180
-1,260
2006
2007
2008
2009
2010
2011
2012
2013
2014-2016 E
as of Dec.14
15
26%
23%
21%
23%
15%
7%
Sugar
Iron Ore
WTI Crude
Oil
Soy
LME Metals
Ibovespa
Cattle
FOEX PIX
BHKP
Iron Ore
Crude Oil
Soy
LME
Metals
Ibovespa
Cattle
Pulp BHKP
-12%
-47%
-46%
-22%
21%
-3%
-12%
-34%
-43%
-21%
-8%
-3%
21%
18% | 4%
FIBR3|FBR
(1) Since 2009 | (2) Except Iron Ore (Average of: Vale, Rio Tinto and BHP) and LME Metals | (3) December, 31 st
16
Capacity
(k tons):
1,775
660
595
570
1,570
1,045
2,415
335
625
3,745
340
1,010
3,950
7,450
5,300
Interest
71
46
69
41
86
121
34
38
24
41
142
48
498
508
456
468
420
404
424
424
406
342
55
38
67
315
311
297
= 31,385
Interest
Capex
Income Tax
SG&A
111
54
66
235
Positive Working
221 Capital: US$5/t
Delivery (US$/t)
Source: Hawkins Wright (Outlook for Market Pulp, September 2014) | Fibrias 3Q14 considering a FX of R$/US$2.27.
Gray bar includes cash expenses as Interest, CAPEX, SG&A and Taxes (Source: RISI and Fibria).
17
6%
+1,523 kt
23%
+844 kt
+674 kt
12%
-1%
+185 kt
(1)
North
America
Western
Europe
China
6%
4%
0%
+11 kt
-37 kt
Total
22%
Total
Others
(1)
+60 kt
+319 kt
North
America
Western
Europe
12%
+688 kt
+454 kt
China
Others
2014
2015
Total
FORECAST
REALIZED
PREVIOUS
FORECAST
LAST
FORECAST
PREVIOUS
FORECAST
LAST
FORECAST
PREVIOUS
LATEST
Woodfree
-25
199
256
550
760
525
1,215
Tissue
1,184
833
1,518
1,390
903
727
3,605
2,950
Cartonboard
2,428
2,128
1,300
2,100
300
380
8,158
8,773
Total
3,587
3,160
2,818
3,746
1,753
1,867
8,158
8,773
18
(million t)
11M2013
7.468
11M2014
7.914
3.082
3.792
1.869 1.958
BHKP Total
Latin
America
Indonesia
2.085
1.592
226 144
151 41
55 14
USA
Canada
Western
Europe
Others*
(kg/person/year)
35
30
25
20
15
10
5
0
LTM Growth
Rate +4.2%
2005
22
26
10
9
2006
10
13
2007
16
12
23
24
17
2008
16
17
20
21
19
20
21
23
21
25
15
15
12
7
2009
Eucalyptus
(1)
(2)
(3)
22
23
23
14
12
11
L.America
Asia FE
(Kg/capita/year)
9 7
E.Europe
China
(In percentage)
10
W.Europe
Japan
Africa
2010
2011
Hardwood
2012
Total
2013
5
1
11M2014
N.
West Japan Oceania East LatAm
America Europe
Europe
China
Africa
19
502
501
4
3Q13
Maintenance
Downtimes
18
( 23 )
Wood
Utilities
Other
3Q14
+ 0.2%
Energy sales and operational efficiency have contributed for cash production cost stability.
(Utilities: 3Q14: R$ 34/t I 2Q14: R$ 36/t I 3Q13: R$ 12/t)
21
Cash Production Cost saw a annual increase of 3.7% over the past
6 years
Fibria Cash Production Cost (1) (R$/ton)
CAGR: + 3.7%
505
432
2009 (2)
448
2010 (2)
471
473
2011
2012
2013
518
Consistently
controlling the
production
cash cost at a
level below
the inflation
pace.
3Q14 LTM
22
2.00
Exchange Rate
Average (R$/US$)
1.76
1.67
639
Fibria net pulp price
(US$/t)
456
670
1,179
912
660
EBITDA Margin
1,067
627
29%
581
2.10
610
1,281
676
40%
1.95
34%
2,526
1,964
2.29
2.72(3)
572
567
1,310
1,542
Market
Consensus
1,133
657
36%
680
40%
676
38%
2,796
2,708
2013
LTM 3Q14
2,253
1,522
EBITDA (R$ million)
2009 (1)
2010 (1)
2011
2012
2015
(1) Excludes Conpacel | (2) 2014 year end market consensus | (3) According to Focus Report (Brazilian Central Bank Jan.2014) | (4) According to Poyry full cost estimate - includes Manufacturing +
Delivered costs to Rotterdam + Depreciation + ROCE of 9%
23
Fibria delivers one of the highest EBITDA/t and FCF/t of the industry
Free cash flow generation - 3Q14 LTM (R$ Million)
2,708
317
(1,509)
Adjusted EBITDA
Capex
1,119
(370)
Interest
(paid/received)
Working Capital
(20)
(7)
Taxes
Other
507
59
(283)
Adjusted EBITDA
Capex
(69)
Interest
(paid/received)
Working Capital
210
(4)
(1)
Taxes
Other
(1) Does not include: asset sales, expenses on bonds repurchase, expenses related to the REFIS on subsidiaries profits abroad and tax credits from the
BEFIEX program.
24
Capital Structure: Fibria has achieved the lowest leverage ratio among
its Latin American peers
Net Debt/EBITDA (x)(1)
14.8
13.2
11.7
4.8
4.5
4.5
3.7
3.6
3.1
3.6
2.9
3.1
2.4
1Q12
2Q12
3Q12
Fibria
4Q12
Suzano
1Q13
Klabin
2Q13
3Q13
4Q13
CMPC
1Q14
4.2
2.7
2.4
2.3
3.7
2.7
2.6
1.7
1.7
4Q11
11.1
2Q14
Arauco
3Q14
2014 2
Eldorado
Fibria
Arauco
CMPC
Klabin
Suzano
S&P
BB+/Positive
BBB-/Stable
BBB+/Negative
BBB-/Negative
BB/Stable
Moodys
Ba1/Positive
Baa3/Stable
Baa3/Negative
Ba2/Stable
Fitch
BBB-/Stable
BBB/Stable
BBB+/Stable
BBB-/Negative
BB/Stable
(1)
25
2,168
Land Deal
149
1,473
410
1,064
2014
1,441
1,255
834
829
450
299
384
2015
100
976
506
422
2,020
762
128
530
750
554
634
2016
2017
2018
2019
Foreign Currency
1,341
2020
2021
26
4-
2022
2023
Local Currency
September 2014
Cost of debt: 3.7%
Average maturity: 55 months
363
343
228
45
183
190
133
173
210
2014
2015
2016
552
513
217
181
425
56
335
332
369
251
73
178
2017
2018
2019
2020
Foreign Currency
208
56
153
2021
20
2022
2023
591
591
2024
Local Currency
26
But the initiatives have not finished. There are certain ongoing
negotiations that will improve Fibrias debt profile even further
Tranche A: L + 1.30% p.a.| 5 year term loan with the amortization starting at the end of year 4.
Cost reduction of 32.5 bps from our last comparable EPP.
Tranche C: L + 1.55% p.a. | 6-year Term Loan with the amortization starting on Jan/2020.
Average term increase of 1.5 years and cost reduction of 7.5 bps from our last comparable EPP.
627
(revolver)
2014
2015
2016
2017
Other
2018
ACC/ACE
2019
ECN
2020
BNDES
2021
Bond
2022
2023
2024
EPP
27
7.5
6.3
4.1
8.6
4.2
3.3
2.6
6.3
2.5
3.5
2009
2010
2011
Gross Debt
2012
2013
473
5.9
414
5.5
408
5.2
4.6
350
268
3.0
Sept/2014
2009
2010
2011
3.7
2012
2013
217
LTM 3T14
Net Debt
Interest
Reduction
Cost of Debt
Reduction
This dynamics
creates a virtuous
cycle
28
Issuance
Rating
Maturity
Volume
T-Spread
Coupon
X Book
2024
US$600 mn
275 bps
5.25%
11.5x
Braskem
Baa3/BBB-/BBB-
2024
US$500 mn
340 bps
6.45%
11.0x
Petrobras
Baa1/BBB/BBB
2024
US$2.5 bn
350 bps
6.28%
3.3x
Klabin
BBB-/BBB-
2024
US$500 mn
269 bps
5.25%
6.0x
Samarco
BBB-/BBB
2024
US$500 mn
288 bps
5.375%
3.6x
Fibria
Maturity
Volume
G-Spread
Yield
Fibria
2024
US$600 mn
316 bps
5.198%
Braskem
Baa3/BBB-/BBB-
2024
US$500 mn
450 bps
6.387%
BBB-/BBB-
2024
US$500 mn
354 bps
5.635%
Odebrecht
Baa3/BBB-/BBB
2023
US$800 mn(1)
394 bps
5.986%
Petrobras
Baa1/BBB/BBB
2024
US$2.5 bn
533 bps
7.106%
Baa3/BBB-/BBB-
2023
US$750 mn
384 bps
5.709%
BBB-/BBB
2024
US$ 500 mn
456 bps
6.335%
Klabin
Gerdau
Samarco
(1) Outstanding:
US$102 mn
29
Fibria has the simplest and most transparent call in the industry
Negative
Pulp supply
Neutral
Positive
Tissue
China
Closures/conversions
Inefficient capacities in China
Demand
Fiber and grade substitution
Pulp price
Brazil GDP
Energy crisis
FX
Capex inflation
Tax
Corporate Governance
Cost inflation
Rating
30
Final Remarks
31
100%
75%
65%
70%
43%
60%
50%
50%
40%
30%
30%
33%
20%
15%
10%
0%
Forestry
Industrial
Logistics/Other
Total
2015
2016
2017
2018
2019
33
Fibrias
Owned Land
Total
Ha
Book Value
Market Value
(000)
R$/ha
R$/ha
491
2,535
7,964
34
Max Value Project Turning areas per hectare into square meter
The targeted area represents only 0.6% of the land owned by Fibria;
Fibria is seeking value creation for its shareholders with capital discipline
PULP
INDUSTRY
CONSOLIDATION ?
Potential
Growth
Prospects
BIO-ENERGY
OTHER OPPORTUNITIES
- Complementary to pulp
Portocel
- Ensyn
36
-21%
656
5,054
5,299
5,184
5,271
624
596
432
448
2009*
2010*
549
545
471
473
505
518
2011
2012
2013
3Q14 LTM
5,251
4,600
2009*
2010*
2011
2012
2013
3Q14 LTM
593
-28%
826
593
766
605
40%
678
584
29%
699
34%
2,526
649
648
Inflation Effect**
Historical Value
1,964
36%
40%
38%
2,796
2,708
2013
3Q14 LTM
2,253
1,522
2009*
2010*
2011
Historical Value
2012
2013
3Q14 LTM
2009*
2010*
2011
2012
Inflation Effect**
37
Back up
38
3Q14 Results
Net Revenue (R$ million)
3Q13
1.334
1.345
1.372
1.271
1.841
2Q14
1.694
1.746
2Q14
3Q14
3Q14
Production
3Q13
Sales
41%
482 501
3Q13
559
486
2Q14
478 502
35%
35%
762
594
613
2Q14
3Q14
3Q14
Cash cost
3Q13
39
Amount
Annual tax deduction:
R$85 million (tax)
Goodwill
(Aracruz
acquisition)
Forestry Capex in
Mato Grosso do
Sul state
Benefit
2018
Undefined
Amount
Tax loss
carryforward
Accumulated tax
credits
Balance Sept./2014:
-PIS/COFINS: R$556 million
-withholding tax (IR and CSLL):
R$604 million
-Befiex: R$537 million
2010
2011
2012
2013
LTM 3Q14
R$ 7 million
R$ 16 million
R$ 4 million
R$ 15 million
R$ 31 million
R$ 20 million
40
MAI* Pulp:
(adt/ha/year)
15.0
12.1
10.6
15.0
15.0
15.0
15.0
Conservative assumption
10.9
2010
2015
2020
2025
2030
2035
2040
2045
Actions:
Genetic improvement
Excellence in forestry management
Superior industrial efficiency
41
Leadership position
Industry Outlook(1)
Fiber Consumption
403 million t
58%
42%
Recycled Fiber
234 million t
Pulp
169 million t
18%
82%
Mechanical
31 million t
Chemical
139 million t
60%
40%
Integrated Mills
84 million t
Market Pulp
56 million t
51%
49%
Softwood/Other
27 million t
Hardwood
29 million t
35%
65%
Acacia/Other
10 million t
Eucalyptus
19 million t
71%
Other Eucalyptus
Pulp producers:
13 million t
(1)
29%
Fiber Consumption, Recycled Fiber and Pulp: RISI | Market Pulp, Hardwood and Eucalyptus: PPPC Special Research Note - May 2014
42
117,611
114,507
85,291
P&W
Consumption
(000 tons)(1)
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
37,474
26,877
15,548
Tissue
Consumption
(000 tons)(1)
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
Source: RISI
43