HSBC IV LatAm Natural Resources Conference

February, 2015

FIBRIA APP WITH THIS PRESENTATION IS AVAILABLE FOR DOWNLOAD AT APPLE STORE AND GOOGLE PLAY.

Disclaimer

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
companys 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.

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

Main Figures 3Q14 LTM

Pulp capacity

million tons

5,300

Net revenues

R$ billion

7.1

Total Forest Base(1)

thousand hectares

961

Planted area(1)

thousand hectares

560

R$ billion

7.6

Net Debt/EBITDA (in Dollars)(2)

2.4

Net Debt/EBITDA (in Reais)

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.

Fibrias 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

Fibrias Commercial Strategy

Sales Mix by End Use - Fibria

Highlights

End Use - 4Q14

Region - 4Q14
N.
America
27%

Tissue
56%

Europe
40%
Asia
23%

Printing &
Writing
25%
Specialties
19%

Other
10%

Sales Mix by Region - Fibria

11% 9% 11% 10% 10% 10% 11% 10% 9% 10% 8%
22% 25%

14% 20%

37%

46% 41%

30%

46%

20%

8%

8%

9%

9% 10% 10%

20% 23% 25% 26% 21% 26% 26% 26% 27% 25% 23%
31% 28%

35% 44%

43% 41% 36%

42%

43% 35% 36%

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)

39% 40%
46% 42%

29% 29% 24%

26% 26% 30% 22% 28% 31% 30%
26% 27%
19% 22%
18%

4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14
North America

Europe

Asia

Other

Shareholder Structure and Corporate Governance

Votorantim
Industrial S.A.
(1)

29.42%

BNDES
Participaes (1)

30.38%

Free
Float (2)

General
Meeting

40.20%
Fiscal
Council
20% independent
members
Role of CEO and
chairman is split

Board of
Directors

Listed on Novo Mercado, highest CG level at BM&FBovespa:

Only 1 class of shares 100% voting rights
100% tag along rights (Brazilian corporate law establishes 80%)

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

Policies approved by the Board of Directors:

Indebtedness and Liquidity

Market Risk Management

Risk Management

Board of Directors with minimum 20% independent members

Corporate Governance

Financial Statements in International Standards IFRS

Related Parties Transactions

Adoption of Arbitration Chamber

Anti-Corruption

SEC Registered ADR Level III program

(1) Controlling group
(2) Free Float 40.14% + Treasury 0.06%

Information Disclosure
Securities Trading
Antitrust
Genetically Modified Eucalyptus

Pulp and Paper Market

9

10

11

As a result we had better prices than expected

BHKP Delivered to Europe (USD/t)

820

814

810
800
790

795
788

791
784

780

772
770

767

765

770

772

4Q13

Annual 2013

760

750
740
1Q13

2Q13

3Q13

Consultants average for 2013

Realized PIX/FOEX price

Consultants: Hawkins Wright, RISI and Brian McClay (published in the end 2012 for 2013 prices)

12

13

14

 and also better prices than initially projected

BHKP Delivered to Europe (USD/t)

800

782
780

768
752

760
740

737

746
729

734
733

720

718
700

696
680
660
640
1Q14

2Q14

3Q14

Consultants average for 2014

4Q14

Annual 2014

Realized PIX/FOEX price

Consultants: Hawkins Wright, RISI and Brian McClay (published in the end 2013 for 2014 prices)

15

Then, what about 2015?

BHKP CAPACITY CHANGES

Expected scenario for 2015 in Dec14
Suzano Maranho

400
750

Montes del Plata

265

Oji Nantong

750

CMPC Guaiba II
200

Eldorado
Portucel Cacia

30

Old Town (Expera)

85

Sappi Cloquet
April Rizhao

Ence Huelva
Possible closures*
Net

115
-65
-315
-400 to -800

Realized scenario in 2015

1,415 to 1,815

BEKP demand growth**

1005

*Based on annual closures average (400,000 to 800,000 t/yr)

**Source: PPPC Outlook for Eucalyptus Market Pulp September 2014

16

Global Market BEKP Demand

Shipments of Eucalyptus Pulp (1)

Producer Inventories Hardwood (1)

Days of Supply

2014 vs. 2013

11%

Dec/14: 36 days

60
50
40

+1,734 kt

30

20%
13%

6%
5%

+717 kt

+386kt

20
10

+537 kt

+92 kt
Total
(1)

North
America

05

Western
Europe

China

06

07

08

09

10

11

12

13

14

Others
Nov./14: 38 days | Dec./13: 38 days
(1)

Source: PPPC World 20 December/2014

Source: PPPC World 20 December/2014

Paper Capacity increase in China

2013

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

4,028

4,608

Total

3,587

3,160

2,818

3,746

1,753

1,867

8,158

8,773

Source: Fibria and Independent Consultants

17

Global Market Pulp Demand

Hardwood demand will continue to increase at a faster pace than Softwood
Hardwood (BHKP) vs. Softwood (BSKP) (000 ton)

Paper Production Runnability with BHKP

35.000
30.000
25.000
20.000

2013 - 2018 CAGR:

Hardwood: +2.8%
Softwood: +0.7%

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

Source: RISI conference, August 2014.

Softwood

Source: PPPC

NBSK vs. BHKP - Prices(1)

Demand growth rate

000 ton
Hardwood

1998
15.0

2008
24.5

2018
32.8

Growth
19982008

Growth
20082018

63%

34%

1100

Spread Dec./14:
US$ 191

200

1000

150

900
800

100

Eucalyptus

6.0

14.2

23.4

137%

63%

700
Average spread:
US$ 109

50

600
500

Softwood

17.6

21.6

24.8

Market Pulp

32.6

46.1

57.1

23%

15%

400

Spread
Source: PPPC. Excludes Sulphite and UKP market pulp.

(1)

Average spread

BHKP

NBSK

Source: FOEX |Average spread in the last 5 years.

18

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
3.000

Softwood (BSKP) Market Pulp

PM Capacity, 1000 t/a

3.000

Weighted average
technical age 12.3 years

PM Capacity, 1000 t/a

Weighted average
technical age 21 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

30

WEAK

20

10

0
30

WEAK

25

Technical Age, years

North American Pulp Mills

Other Pulp Mills

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.

19

Capacity closures DO happen

Closures of Hardwood Capacity Worldwide

(000 ton)
-85

-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

Source: PPPC and Fibria

20

Among the industrys lowest cash cost producers

Total Cash Cost of BHKP delivered to Europe (US$/t)

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

4Q14 net price:

US$ 552/t

Interest
71

46

69

41

86

121

34

38

39

41
48

498

508

456

468

420

404

424

424

Cash Cost (US$/t)

406

342

55

315

38

311

67

297

119

111

235

= 31,385

51
61

W/K
Interest
Capex
Income Tax
SG&A

186

Delivery (US$/t)

Source: Hawkins Wright (Outlook for Market Pulp, September 2014) | Fibrias 4Q14 considering a FX of R$/US$2.54. | Brazil ex-Fibria 3Q14 considering FX of R$/US$2.27.
Gray bar includes cash expenses as Interest, CAPEX, SG&A and Taxes (Source: RISI and Fibria).

21

Gross capacity addition should not be counted as the only factor

influencing pulp price volatility.(1)
List Price bottoming at US$650/t in 2011 and US$724/t in 2014
APP South
Sumatra(2)

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

Capacity (000 ton)

800

BHKP prices - CIF Europe (US$/ton)

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 (Dec/14), Brian McClay (Jan/14) and RISI (Dec/14)
(2) Partially integrated production

22

Lowest volatility among commodities

Commodities Historical Volatility (US$)(1)

35%
29%

26%

23%

21%

23%
15%
7%

Sugar

Iron Ore

WTI Crude
Oil

Soy

LME Metals

Ibovespa

Cattle

FOEX PIX
BHKP

Change Dec./2014 vs. Dec./2013(3)

Sugar

Iron Ore

Crude Oil

Soy

LME
Metals

Ibovespa

Cattle

Pulp BHKP

Commoditiy Spot Price

-12%

-47%

-46%

-22%

21%

-3%

S&P Sector Index(2)

-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

23

Financial and Operational Highlights

24

No exposure to eletricity shortage risks, in spite of which the

company has benefited from the sale of its surplus energy

466
26

4Q13

472

Wood

FX

( 22 )

(7)

Utilities

Energy
Consumption

Others

4Q14

+ 1.3%

Improved results boosted by energy sales and operational efficiency.

(Utilities: 4Q14: R$37/t I 3Q14: R$34/t I 4Q13: R$16/t)

25

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

519

Consistently
controlling the
production
cash cost at a
level below
the inflation
pace.

2014

(1) Constant Currency (2) Excludes Conpacel

26

Net Results (R$ million) 2014

Hedge
FX Debt

3,530
(112)

2,791

(696)

851

(504)

(1,874)
(380)

141
Adjusted
EBITDA

Befiex

Other nonreccuring exp.

/non-cash

EBITDA

FX Debt / Early prepaid Net Interest

Hedge

debt

Deprec.,
amortiz.and
depletion

Taxes

(54)
Others (1)

163
Net Income

Non-recurring
effects
(1)

Includes other exchange rate/monetary variations and other financial income/expenses.

Mandatory dividends of R$37 million.

27

27

Free Cash Flow (1) 2014

R$ million

2,791

636

( 1.591 )
( 411 )
Adjusted
EBITDA

2014

Capex

Interest
(paid/received)

( 136 )

( 29 )

12

Working
Capital

Taxes

Others

(1)

Free Cash Flow

353

989

4Q14 receivables

Free Cash Flow

Modernization (trucks);

Higher sales volume (+107 kt);

R&D;

Change in cliente mix, with lower receivables forfaiting transactions;

TLS 2 (feasibility study).

FX effect.

(Pro-forma)

Capex includes investment in modernization and higher % of third-party wood, decreasing as from 2016;

2015

Debt service reduction;

Potencial improvement on working capital (customers and suppliers).

(1) Does not include: asset sales, expenses on bonds repurchase and tax credits from the BEFIEX program.

28

28

FX and Pulp Price explain 80% of Fibrias EBITDA Margin

Each 10% depreciation of the Real increases EBITDA by approx. R$600 million

Exchange Rate
Average (R$/US$)

2.00

1.76

670
Fibria net pulp price
(US$/t)

Marginal producer cost

(US$/t)(4)

912
660

1,067
676

627
40%

EBITDA Margin

639

29%

34%

2,526
EBITDA (R$ million)

581

2.72(3)

610

572

564

1,281

1,310

1,534

2.10

456
1,179

Fibria net pulp price

(R$/t)

1.67

1.95

2.29

1,133
657

36%

1,964

2,253

2011

2012

680

40%

Market
Consensus

676

38%

2,796

2,791

2013

2014

1,522

2009 (1)

2010 (1)

2015

(1) Excludes Conpacel | (2) 2014 year end market consensus | (3) According to Focus Report (Brazilian Central Bank Jan. 23rd, 2014) | (4) According to Poyry full cost estimate - includes Manufacturing
+ Delivered costs to Rotterdam + Depreciation + ROCE of 9%

29

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)

Fibrias historical data in BRL. | (2) Market consensus.

30

Indebtdeness
Net Debt (Million)

Total Debt and Interest Expenses (Million)

Net Debt/EBITDA (US$)

Net Debt/EBITDA (R$)

2.8

2.7

2.7

Interest (US$)

61

50

44

2.6
2.5

7,849

2.4

3,351

R$

Dec/13

Dec/14

8,327
3,498

2,842

Sep/14

- 25%

8,574
4,172

2,984

Dec/13

9,773

7,549

7,313

Sep/14
R$

US$

3,135

Dec/14

US$

Average Tenor (months) and Cost of Debt* in US$ (% p.a.)

Debt Amortization Schedule (US$ Million)

4.3

893
600

3.7

632
459

52

375

364

363

3.4

600

(revolver)

55

55

Sep/14

Dec/14

223
293

93

(cash)

Liquidity 2015

2016

2017

Pre-payment

2018

BNDES

2019

ECN

2020

ACC/ACE

2021

22

2022

2023

Voto IV

Bonds

2024

Dec/13

(*) Considering the portion of debt in reais fully adjusted by the market swap curves at the end of
each period..

31
31

A consistent and disciplined approach focused on reducing debt

and its cost
Debt (US$ million) x Leverage (US$)

Interest (US$ million) x Cost of Debt (US$)

7.5
6.3
4.1

8.6

4.2

3.3

2.6

6.3

2.5

473

5.9
414

5.5
408

5.2

2010

2011

2012

Gross Debt

2013

2014

3.4 *

350
268

3.1 2.8

2009

4.6

200

2009

2010

2011

2012

2013

2014

Net Debt

Free Cash Flow

Increase

Interest
Reduction

Cost of Debt
Reduction

This dynamics
creates a virtuous
cycle

(*) Considering the portion of debt in reais fully adjusted by the market swap curves of Dec. 31, 2014.

32

New issuance better priced than Investment Grade issuers

Issuance
Rating

Maturity

Volume

T-Spread

Coupon

X Book

Ba1 / BBB- / BB+

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

Secondary Market - As of Jan. 29, 2015

Rating

Maturity

Volume

G-Spread

Yield

Fibria

Ba1 / BBB- / BB+

2024

US$600 mn

343 bps

5.146%

Braskem

Baa3/BBB-/BBB-

2024

US$500 mn

473 bps

6.430%

BBB-/BBB-

2024

US$500 mn

379 bps

5.512%

Odebrecht

Baa3/BBB-/BBB

2023

US$800 mn(1)

459 bps

5.225%

Petrobras

Baa1/BBB/BBB

2024

US$2.5 bn

535 bps

7.060%

Baa3/BBB-/BBB-

2023

US$750 mn

386 bps

5.508%

BBB-/BBB

2024

US$ 500 mn

453 bps

6.278%

Klabin

Gerdau
Samarco
(1) Outstanding:

US$102 mn

33

and performing better than Investment Grade issuers

550

500

450

G Spread

400

350

300

250

200

150
30/9

5/10

Fibria 2024

10/10 15/10 20/10 25/10 30/10

Braskem 2024

Klabin 2024

4/11

9/11

14/11 19/11 24/11 29/11

Odebrecht 2023

Petrobras 2024

4/12

9/12

14/12 19/12 24/12 29/12

Gerdau 2023

Samarco 2024

3/1

8/1

Votorantim 2024

13/1

18/1

23/1

BRF 2024

Source: Bloomberg - Jan. 23, 2015.

34

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

35

Final Remarks
36

Max Value Project Zero base budgeting

The assumption for the new process is that the budget for next year is zero.

Budget developed primarily based on input

consumption indicators

Only one discussion cycle, initially based on

budgetary guidelines

Individual discussion for each expenditure package,

including Sustaining CAPEX and OPEX

Discussion details based on the materiality of the

expense within the package

Robust basis increasing the visibility of the rationale

for the proposed budget amounts

Each expense and capex

need to be explained, not
only the additional ones

Zero Base Budgeting encourages a questioning and

challenging attitude of the status quo
37

Max Value Project Zero base budgeting

Value achievement share by category

23%

100%

NPV expected curve

80%

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

Approx. R$1.5 billion NPV

Note: (1) Technical Limit potential reflecting 2013 conditions; (2) Coverage of expenses with established Technical Limits (e.g. 374/3233=12%).
Source: Fibria, ZBB team analysis.

38

Max Value Project A hidden asset value

Book Value of own Land as of Sep/14:

R$1.2 billion

Market Price of own Land as of Dec/14:

Sep/14:
R$3.9 billion

Fibrias
Owned Land
Total

Ha

Book Value

Market Value

(000)

R$/ha

R$/ha

491

2,535

7,964

Land sold in 2013 The Parkia Deal:

- 206k ha;
- Up to R$1.65 billion (~R$8k per ha).

39

Max Value Project Turning areas per hectare into square meter

The targeted area represents only 0.6% of the land owned by Fibria;

Real estate thinking: minimum value creation of R$500 million NPV.

40

Fibria is seeking value creation for its shareholders with capital discipline

PULP

INDUSTRY

- Growth with discipline

CONSOLIDATION ?

- Best portfolio of projects

Potential
Growth
Prospects
BIO-ENERGY

OTHER OPPORTUNITIES

- Complementary to pulp

Portocel

- Ensyn

Land and forest

41

The maturity of synergies captured since Fibrias creation improved its

operating indicators
PRODUCTION VOLUME (000 t)

CASH COST (R$/ton)

BEST PRACTICES AND OPERATING STABILITY

+15%

-21%
656

5,054

5,299

5,184

5,271

624

596

432

448

2009*

2010*

5,274

549

545

471

473

505

519

2011

2012

2013

2014

4,600

2009*

2010*

2011

2012

2013

2014

Historical Value

SG&A (R$ million)

EBITDA (R$ million) - EBITDA MARGIN (%)

STRUCTURE AND PROCESS SIMPLIFICATION

900

593

-21%
826

593

766
605

40%
678
584

29%

699
648

Inflation Effect**

34%

2,526

651

1,964

36%

40%

39%

2,796

2,791

2013

2014

2,253

1,522

2009*

2010*

2011

Historical Value

2012

2013

2014

2009*

2010*

2011

2012

Inflation Effect**

* Excludes Conpacel | ** IPCA index considered to calculate the inflation effect.

42

Back up
43

Fibrias tax structure

Tax benefits (R$)
Fiscal - annual adjustment
Benefit

Amount
Annual tax deduction:
R$89 million (tax)

Goodwill
(Aracruz
acquisition)

Remaining Balance Dec/14:

R$1.1 billion (base)

Forestry Capex in
Mato Grosso do
Sul state

2014 tax deduction related to

depletion: R$37 million

Tax loss carry forward and tax credits

Maturity

Benefit

Amount

Tax loss
carryforward

2018

Balance up to Dec. 14: R$451

million (base)
Balance Dec./2014:
- PIS/COFINS: R$570 million

Accumulated tax
credits

Undefined

- Withholding tax (IR and CSLL):

R$681 million
- Befiex: R$455 million
- Reintegra: R$37 million

Tax payment (cash basis)

2009

2010

2011

2012

2013

2014

R$ 7 million

R$ 16 million

R$ 4 million

R$ 15 million

R$ 31 million

R$ 29 million

44

Due to productivity gains in its forests, Fibria had the opportunity to

explore this new ownership model
FIBRIAS GAINS IN IMACEL DUE TO INVESTMENTS IN BIOTECHNOLOGY (TONS OF PULP/HA/YEAR)

MAI* Pulp:
(adt/ha/year)

15.0
12.1
10.6

15.0

15.0

15.0

15.0

Conservative assumption

10.9

2012 field trials = 11.9

2010

2015

2020

2025

2030

2035

2040

2045

*MAI: Mean annual increment

Actions:
Genetic improvement
Excellence in forestry management
Superior industrial efficiency

45

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

46

Supply structural changes puts pressure on the industry

MARKET PULP CAPACITY RANKING 2014 (000T)

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

APP South Sumatra

Indonesia

2.0 Mt

1Q2017

BHKP

Confirmed

Fibria Trs Lagoas II

Brazil

1.75 Mt

BEKP

Unconfirmed

USD/Adt, 2013 cost level

COST CURVE EVOLUTION

2000

Bleached Softwood Kraft Pulp (BSKP)

4000

6000

Cost position
of marginal
producer

Cumulative Capacity Million t/a

Bleached Hardwood Kraft Pulp (BHKP)

Unbleached Kraft Pulp (UKP)
Mechanical Pulp (MP)
Source: Hawkins Wright , Poyry and Fibria Analysis (as of Dec. 2014).

47

Benefiting From Chinas Growth

Chinas Hardwood Imports of BHKP by Country (1)
(000s t)

(million t)

11M2013
7.468

World Tissue Consumption, 1991-2013 (3)

Latin America is the

leading exporter of BHKP
to China, accounting to
approximately 48% of
China's total imports in
11M2014.

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%

1991 1996 2001 2006 2009 2010 2011 2012 2013

N.America
Middle East
Oceania

* includes Russia, China, Thailand and New Zealand.

China's Share of Market Pulp (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)

Between 2005 and 2013,

the Chinese market share
21
of eucalyptus shipments
increased by 14 p.p.
(total market pulp: + p.p.)

9 7

E.Europe
China

Per Capita Consumption of Tissue by World Region (3)

(In percentage)

10

W.Europe
Japan
Africa

2010

2011

Hardwood

2012

Total

PPPC Pulp China

PPPC W20. Coverage for chemical market pulp is 80% of world capacity
RISI

2013

5
1

11M2014

N.
West Japan Oceania East LatAm
America Europe
Europe

China

Africa

48

Global Paper Consumption

CAGR 1996 2006
Developed Markets: + 1.7%
Emerging Markets : + 6.0%

117,611

CAGR 2007 2016

Developed Markets: - 4.0%
Emerging Markets : + 4.1%

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

CAGR 2007 2016

Developed Markets: + 1.4%
Emerging Markets : + 6.7%

CAGR 1996 2006

Developed Markets: + 2.4%
Emerging Markets : + 6.9%

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

49