FACT SHEET 3Q18 CORPORATE GOVERNANCE. MARKET CAP (SEPTEMBER 30TH, 2018) BRL 6,225.0 million CLOSING SHARE PRICE ON SEPTEMBER 30TH, 2018 BRL 9.

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1 FACT SHEET 3Q18 MARKET CAP (SEPTEMBER 30TH, 2018) BRL 6,225.0 million CLOSING SHARE PRICE ON SEPTEMBER 30TH, 2018 BRL 9.03 TOTAL SHARES AT THE END OF SEPTEMBER 691,784,501 TREASURY SHARES 2,410,659 FREE FLOAT 40% DURATEX INVESTOR RELATIONS Investor Relations Officer: Carlos Henrique Pinto Haddad Executive Manager: Guilherme Setubal Souza e Silva investidores@duratex.com.br Conference Call/ Webcast: November 5th, 2018, Monday Portuguese: Time: 5:00 p.m. (BR time; 2:00 p.m. NYT) November 6th, 2018, Tuesday English: Time: 11:00 a.m. (BR time; 8:00 a.m. NYT) Supporting material: To connect: Participants in Brazil: or Participants abroad: Dial-in: ou Toll-free: (only in English) Password: Duratex Web conference: CORPORATE GOVERNANCE for addressing matters related to Corporate Governance to senior management: governanca. corporativa@duratex.com.br Shares listed on the Novo Mercado of B3; Only ordinary shares are in circulation, that is, each share confers the right to one vote at the General Shareholder Meetings; 100% Tag-Along rights for the shares; 3 independent members on the Senior Board of Directors; Advisory Committees to the Board: People, Nomination and Governance, Sustainability, Auditing and Risk Management, Trading and Disclosure, and Evaluation of Transactions with Related Parties; Dividend policy requiring a minimum distribution of 30% of adjusted net earnings; Policy in force for the disclosure of Material Events and Facts in the Trading of Securities; Compliance with the ABRASCA Code for Selfregulation and Good Practices in Publicly Traded Companies; Brokers that cover the company: Bradesco BBI, BTG Pactual, Citibank, Empiricus Research, HSBC, JP Morgan, Merrill Lynch, Morgan Stanley, Nau Securities, Safra, Satander. For those unable to participate in the conference calls live, full audio playback will be available via the Company s website ( or via telephone (55-11) or (55-11) for both Portuguese and English versions, the access codes being, Portuguese: # and English: #.

2 Consolidated Financial Results In BRL '000 3Q18 3Q17 % 2Q18 % 9M18 9M17 % Highlights Volume shipped Deca ( 000 items) 6,924 6, % 6, % 20,013 19, % Volume shipped Ceramic Tiles (m 2 ) 1,501, ,237, % 4,000, % Volume shipped Wood (m 3 ) 768, , % 613, % 1,982,562 1,727, % Consolidated Net Revenue 1,512,525 1,019, % 1,167, % 3,685,984 2,888, % Gross profit 427, , % 309, % 1,011, , % Gross margin 28.3% 29.1% 26.5% 27.4% 26.8% EBITDA according to CVM No. 527/12 (1) 902, , % 501, % 1,629, , % EBITDA Mg CVM No. 527/ % 29.0% 43.0% 44.2% 24.5% Adjustments for non-cash events (47,390) (43,709) 8.4% (28,248) 67.8% (118,399) (126,276) -6.2% Non-recurring events (645,866) (46,821) 1,279.4% (253,254) 155.0% (899,120) (49,493) 1,716.7% Adjusted and Recurring EBITDA (2) 209, , % 220, % 611, , % Adjustred and Recurring EBITDA margin (3) 16.4% 20.1% 19.8% 18.0% 18.4% Net earnings 376,348 83, % 166, % 573, , % Recurring net earnings 61,566 52, % 27, % 119,888 67, % Recurring net margin 4.8% 5.1% 2.5% 3.5% 2.3% INDICATORS Current ratio (4) % % % Net debt (5) 1,949,219 2,069, % 2,163, % 1,949,219 2,069, % Net debt/ebitda LTM (6) % % % Average Shareholder's equity 5,193,868 4,637, % 4,884, % 4,968,867 4,603, % ROE (7) 29.0% 7.2% 13.6% 15.4% 2.9% Recurring ROE 4.7% 4.5% 2.3% 3.2% 2.0% SHARES Earnings per share (BRL) (8) % % % Closing share price (BRL) % % % Net equity per share (BRL) % % % Treasury Shares 2,410,659 2,478, % 2,410, % 2,410,659 2,478, % Market Cap (BRL 1000) 6,225,046 6,527, % 5,997, % 6,225,046 6,527, % (1) EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization): Measure of operational performance in accordance with CVM Instruction 527/12. (2) EBITDA adjusted for non-cash events arising from variation in the fair value of biological assets and combination of businesses, in addition to extraordinary events. (3) For better understanding, the Adjusted and Recurring EBITDA margin calculation does not consider: 3Q18: net revenue related to the sale of biological assets in the second tranche of the transaction with Suzano Papel e Celulose (-) BRL million; 2Q18: net revenue related to the sale of biological assets in the first tranche of the transaction with Suzano Papel e Celulose BRL million. (4) Current liquidity: Current Assets Divided by Current Liabilities. Indicates the amount available in BRL to cover each BRL of shortterm obligations. (5) Net Indebtedness: Total Financial Debt ( ) Cash balance. (6) Financial leverage calculated on the rolling EBITDA over the last 12 months, adjusted for events of a purely accounting and noncash nature. (7) ROE (Return on Equity): measure of performance obtained by taking the annualized Net Earnings over the period, annualized, and dividing by Average Net Equity. (8) Net earnings per share is calculated by dividing the earnings attributable to the company s shareholders by the average weighted number of ordinary shares issued during the period, excluding the ordinary shares held by the Treasury. 2

3 Market and Business Scenario The Brazilian economy continues to recover, although at a more gradual pace than envisaged early this year. In the third quarter of 2018, considering the demand side, there was a reduction in investment spending and a slowdown in household consumption, in line with the downtrend in consumer and business confidence indexes. According to the Brazilian Association of the Building Materials Industry (ABRAMAT, its acronym in Portuguese), the deflated revenue of the industry grew 1.2% year-to-date. The estimate of the association is a slight growth in the last quarter of the year versus the previous year; therefore, they maintain their forecast of 1.5% growth in In addition, the employment level in the industry dropped 0.7% year-to-date. market during the first nine months of the year. On one hand, domestic sales of MDF lines grew 4%; on the other hand, MDP lines grew 8%. In the export markets, the institute has registered a growth of 2% compared to The Brazilian Association of Manufacturers of Ceramic Tiles, Sanitary Ware and Related Products (ANFACER, its acronym in Portuguese) has recorded the sale of million of square meter of ceramic tiles during January to September 2018, which represents an increase of 0.8% compared to the previous year. In the local market, sales have grown 0.3% and in the export market the growth was 4.3% during this time. Even though estimates continue to suggest growth in economic activity, they indicate a gradual pace. In the wood panels industry, the Brazilian Tree Institute (IBÁ, its acronym in Portuguese) registered a 5% increase in demand for wood panels in the local Strategic Management and Investments In the third quarter this year, consolidated investments totaled BRL million. Investments were towards mainly to sustaining manufacturing and forestry operations, of which BRL 59.0 million were directed to property, plant and equipment and BRL 49.7 million towards the biological assets formation. Investments were BRL million year-to-date. This amount is lower than the planned for the time, reinforcing our commitment to cash generation and diligent management of capital allocation. The Duratex Management System, known as SGD, remained on the spotlight during the quarter and continued to improve. This management system, based on discipline and its own methodology, is incorporating new KPIs in its scope, such as ESG aspects and health and safe indicators. We believe SGD is the main tool to leverage our operations to a superior level of performance. We continue dedicating efforts in our Journey of Cultural Transformation, and have experienced improvements in consolidating a new corporate culture. During the quarter, there was the progression of rituals to strengthen the culture and develop the leadership of the company. As a consequence of this cultural transformation, we have sustained the certification GPTW (Great Place to Work), that shows workplaces with high-trust cultures. As a subsequent event, according to the Market Notice of November 1st, 2018, we are shutting down the electronic showers manufacturing operations in Tubarão/SC. The production lines will be relocated to Hydra unit in Aracaju/ SE. This initiative is part of the Company s strategy of manufacturing consolidation, in order to improve the industrial and logistics productivity of its footprint. The logistics operation through a distribution center in the same city will continue in order to sustain the service level in the distribution to the South Region of the country. As a consequence of this restructuring and optimization of the footprint, we expect to improve the productivity of the business. All the initiatives implement and the on-going projects will be key to consolidate a new organization, with a better focus on value generation and higher return to shareholders. 3

4 Consolidated Financial Highlightes (IFRS) NET REVENUES The consolidated net revenue in the quarter was BRL 1,512.5 million, which represents a growth of 48.4% versus the previous year. It is worth mentioning that BRL million of this total is related to the sale of biological assets in the second tranche of the transaction with Suzano Papel e Celulose. Operations in foreign markets have registered net revenue of million in the quarter, of which BRL million is related to exports from Brazil and BRL million is related to the operations in Duratex Colombia. The share of revenues from foreign markets has reached the level of 18.2%. The increase in net revenue was mainly due to higher volume shipped in both business divisions and the price hikes implements in the period. Moreover, the BRL depreciation and the higher volumes exported also contributed to the growth in revenues. In the first nine months of the year, net revenues were BRL 3,686.0 million, which represents an increase of 27.6% versus last year. Disregarding the sale of biological assets in both the first and second tranche to Suzano, the increase in the year would be 17.5%. BRL '000 - consolidated 3Q18 3Q17 % 2Q18 % 9M18 9M17 % Net revenue 1,512,525 1,019, % 1,167, % 3,685,984 2,888, % Domestic market 1,238, , % 928, % 2,995,910 2,403, % Foreign Market 274, , % 238, % 690, , % Exports 145,718 86, % 122, % 352, , % Duratex Colombia 128,465 88, % 115, % 337, , % Net Revenues Breakdown (% in 3Q18): COST OF GOODS SOLD Cash Cost, that is the Cost of Goods Sold net of Depreciation, Amortization and Depletion, and of the variation in the Fair value of Biological Assets recorded in the second quarter was BRL The increase in sales combined with cost pressures in the period have contributed to this growth WOOD DECA/HYDRA CERAMIC TILES 4

5 BRL 000 consolidated 3Q18 3Q17 % 2Q18 % 9M18 9M17 % Cash COGS (836,479) (628,298) 33.1% (690,982) 21.1% (2,172,806) (1,845,481) 17.7% Variation in fair value of biological assets 49,083 40, % 29, % 120, , % Depletion of biological assets (123,839) (30,372) 307.7% (64,135) 93.1% (219,120) (91,834) 138.6% Depreciation, amortization and depletion (173,919) (104,069) 67.1% (131,773) 32.0% (403,444) (298,042) 35.4% Gross profit 427, , % 309, % 1,011, , % Gross margin 28.3% 29.1% 26.5% 27.4% 26.8% BRL 000 ex Duratex Colombia 3Q18 3Q17 % 2Q18 % 9M18 9M17 % Cash COGS (760,279) (575,609) 32.1% (617,805) 23.1% (1,967,486) (1,695,655) 16.0% Variation in fair value of biological assets 48,566 39, % 29, % 119, , % Depletion of biological assets (123,839) (30,372) 307.7% (64,135) 93.1% (219,120) (91,834) 138.6% Depreciation, amortization and depletion (169,467) (100,174) 69.2% (127,759) 32.6% (391,462) (286,515) 36.6% Gross profit 379, , % 271, % 890, , % Gross margin 27.4% 28.4% 25.8% 26.6% 25.9% Net Revenues ex Duratex Colômbia (in BRL million) Cash Cost (in BRL million) and Gross Margin (in %) ex Duratex Colômbia , , , Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Cash Cost Gross Margin COGS Breakdown 3Q18 Wood Division (%) COGS Breakdown 3Q18 Deca Division (%) Other raw materials Resin Paper Wood* Labor Electricity Depreciation and Amortization Fuel Other raw materials Metals Labor Electricity Depreciation and Amortization Fuel * It includes depletion of the amount invested related to the cost of wood 5

6 SELLING EXPENSES In the third quarter of 2018, selling expenses totaled BRL million. This result represents a 16.8% increase compared to the same period in the previous year mainly due to the incorporation of the Ceramic Tiles results, increase in volumes sold, increase in freight costs experienced and growth in exports. Selling expenses as a proportion of net revenues were 12.8%. This figure was affected by the sale of biological assets in transaction with Suzano. Disregarding this effect, the proportion would be 15.2%. From January to September 2018, selling expenses had increased 9.1%, which is lower than the increase experienced in sales. During the nine months of the year, the initiatives to save fixed commercial expenses and investments in promotion and advertising have offset the hike in freight costs. Disregarding the sale of timber in the both tranches in operation with Suzano, selling expenses would represent 15.0% of net revenues year-to-date. The reduction of selling expenses reflects the savings and improvements in the logistic system of Duratex, material aspects in the Duratex Management System. BRL 000 consolidated 3Q18 3Q17 % 2Q18 % 9M18 9M17 % Selling expenses (193,802) (165,861) 16.8% (163,779) 18.3% (508,134) (465,616) 9.1% % of net revenue 12.8% 16.3% 14.0% 13.8% 16.1% Selling Expenses (in BRL million) and % in Relation to Net Revenues ex Duratex Colômbia GENERAL & ADMINISTRATIVE EXPENSES General and administrative expenses totaled BRL 48.7 million in the third quarter of The expenses were BRL 12.5 million greater than the same period last year. From January to September, the expenses amounted BRL million. The increase is a result of the consolidation of Ceramic Tiles business, which has occurred in the fourth quarter last year. Moreover, there was a concentration of advisory services to support strategic projects and higher investments in technology and innovation, according to our long term strategy. In order to partially offset this increase, we continue to explore Zero Based Budgeting methodology for the rest of the administrative structure. 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 Cash Cost Gross Margin BRL 000 consolidated 3Q18 3Q17 % 2Q18 % 9M18 9M17 % General and administrative expenses (48,676) (36,257) 34.3% (42,553) 14.4% (128,657) (106,191) 21.2% % of net revenue 3.2% 3.6% - 3.6% - 3.5% 3.7% - 6

7 EBITDA The following table shows the reconciliation of EBITDA, in accordance to CVM 527/12. We have made two adjustments to this result in an attempt to better illustrate the operational cash generation: the exclusion of events of a purely accounting and noncash nature, and of non-recurring events. Thus, in keeping with best practices, the table below shows the calculation of the indicator which best reflects the Company s cash generation. EBITDA reconciliation in BRL 000 consolidated 3Q18 3Q17 % 2Q18 % 9M18 9M17 % Net earnings 376,348 83, % 166, % 573, , % Income tax and social contribution 189,345 37, % 78, % 278,237 34, % Net financial result 27,482 29, % 48, % 119, , % EBIT 593, , % 293, % 971, , % Depreciation, amortization and depletion 185, , % 143, % 438, , % Depletion of biological assets 123,838 30, % 64, % 219,118 91, % EBITDA according to CVM No. 527/12 902, , % 501, % 1,629, , % EBITDA margin CVM No. 527/ % 29.0% % % 24.5% - Change in fair value of biological assets (49,083) (40,027) 22.6% (29,271) 67.7% (120,933) (121,330) -0.3% Employee benefits 1,693 (3,682) % 1, % 2,534 (4,946) % Non-Recurring events (1) (645,866) (46,821) - (253,254) - (899,120) (49,493) 1,716.7% Adjusted and Recurring EBITDA 209, , % 220, % 611, , % Adjusted and Recurring EBITDA margin (2) 16.4% 20.1% % % 18.4% - (1) Non-recurring events: 3Q18: result from the sale of land of subsidiary Duratex Florestal in the second tranche of transaction with Suzano Papel e Celulose (-) BRL ; result from the sale of timber of subsidiary Duratex Florestal in the second tranche of transaction with Suzano Papel e Celulose (-) BRL ; Non recurring expenses in transaction with Eucatex (+) BRL 1.100; provision for non-recovered assets (+) BRL Q18: result from the sale of land of subsidiary Duratex Florestal in the first tranche of transaction with Suzano Papel e Celulose (-) BRL ; result from the sale of timber of subsidiary Duratex Florestal in the first tranche of transaction with Suzano Papel e Celulose (-) BRL : result from the sale of land of subsidiary Duratex Florestal (-) BRL (2) For better understanding, the Adjusted and Recurring EBITDA margin calculation does not consider: 3Q18: net revenue related to the sale of biological assets in the second tranche of the transaction with Suzano Papel e Celulose (-) BRL million; 2Q18: net revenue related to the sale of biological assets in the first tranche of the transaction with Suzano Papel e Celulose BRL million. Adjusted and Recurring EBITDA in the quarter totaled BRL million, which represents an EBITDA margin of 16.4%. This figure disregards the results of the transaction with Suzano Papel e Celulose. In the cumulated period, EBITDA was BRL million, an increase of 15.2 over the previous year. Adjusted and Recurring EBITDA in 3Q18 (%) WOOD DECA CERAMIC TILES 7

8 NET EARNINGS During the third quarter, the recurring net earnings were BRL 61.6 million, an increase of 17.8% over the last year. The recurring net earnings were BRL million year-to-date, which represents a hike of 77.0%. The total net earnings were BRL million year-to-date, considering non-recurring events. BRL 000 consolidated 3Q18 3Q17 % 2Q18 % 9M18 9M17 % Net earnings 376,348 83, % 166, % 573, , % Non-recurring events (1) (314,782) (30,902) - (139,086) - (453,867) (32,665) % Recurring net earnings 61,566 52, % 27, % 119,888 67, % ROE 29.0% 7.2% % % 2.9% - Recurring ROE 4.7% 4.5% - 2.3% - 3.2% 2.0% - (1) Non-recurring events: 3Q18: result from the sale of land of subsidiary Duratex Florestal in the second tranche of transaction with Suzano Papel e Celulose (-) BRL ; result from the sale of timber of subsidiary Duratex Florestal in the second tranche of transaction with Suzano Papel e Celulose (-) BRL ; Non recurring expenses in transaction with Eucatex (+) BRL 0.726; provision for non-recovered assets (+) BRL Q18: result from the sale of land of subsidiary Duratex Florestal in the first tranche of transaction with Suzano Papel e Celulose (-) BRL ; result from the sale of timber of subsidiary Duratex Florestal in the first tranche of transaction with Suzano Papel e Celulose (-) BRL : result from the sale of land of subsidiary Duratex Florestal (-) BRL ADDED VALUE Value Added in the quarter totaled BRL million. Of this amount, BRL million, equivalent to 34,3% of total Added Value, was allocated to the federal, state and municipal governments in the form of taxes and contributions. Distribution of Added Value (% in 3Q18) Labor Remuneration Government Remuneration Debtholder Remuneration Shareholder Remuneration INDEBTEDNESS Financial leverage continue to present a reduction trend, in line with our strategy. The net debt decreased BRL million in the quarter compared to the previous one; thus, net debt at the end of September was BRL 1,949.2 million. The net debt to EBITDA ratio fell to 2.32 times at the end of the quarter. The positive effect on the reduction of the indebtedness was due to the positive cash generation on the recurring operations combined to the partial collection of the sale of idle assets to Suzano Papel e Celulose. During the third quarter, there was a partial collection of the second tranche of this operations, and the disbursement of the respective taxes. As a result of a lower debt level, we have recorded a 21.4% reduction in the net financial results versus the previous year. The net financial results totaled BRL 27.5 million in the quarter. This benefit is a consequence of the company s strategy to reduce its indebtedness and the liability management focused on a more attractive cost of debt and longer terms. 8

9 BRL 000 3Q18 3Q17 Var BRL 2Q18 Var BRL 2017 Var BRL Short-Term debt 727, ,234 (99,701) 447, , ,824 (37,291) Long-Term debt 2,263,265 2,209,991 53,274 2,542,072 (278,807) 2,410,000 (146,735) Total debt 2,990,798 3,037,225 (46,427) 2,989,617 1,181 3,174,824 (184,026) Cash and equivalent 1,041, , , , ,063 1,074,364 (32,785) Financial Investments - 49,480 (49,480) Net debt 1,949,219 2,069,537 (120,318) 2,163,101 (213,882) 2,100,460 (151,241) Net debt/adjusted and Recurring EBITDA Net debt/equity (in %) 36.2% 44.2% % % - NET FINANCIAL RESULT BRL 000 3Q18 3Q17 % 2Q18 % 9M18 9M17 % Financial revenues 47,097 49, % 39, % 105, , % Financial expenses (74,579) (79,073) -5.7% (88,509) -15.7% (224,437) (287,259) -21.9% Net financial result (27,482) (29,910) -8.1% (48,544) -43.4% (119,301) (151,828) -21.4% Amortization Schedule (in BRL million) , and beyond Total debt at the end of September 2018 (in BRL million) Origin of Debt (%) ,263.3 Short Term Long Term 88 Local Currency Foreign Currency (100% hedged to BRL) 9

10 Operations Wood HIGHTLIGHTS 3Q18 3Q17 % 2Q18 % 9M18 9M17 % SHIPMENTS (IN M 3 ) STANDARD 473, , % 357, % 1,187, , % COATED 295, , % 256, % 795, , % TOTAL 768, , % 613, % 1,982,562 1,727, % FINANCIAL HIGHLIGHTS (BRL '000) NET REVENUE 1,050, , % 747, % 2,425,814 1,823, % DOMESTIC MARKET 802, , % 535, % 1,807,060 1,377, % FOREIGN MARKET 247, , % 211, % 618, , % Net revenue per unit (BRL/m 3 shipped) (1) % % % Cash cost per unit (BRL/m 3 shipped) (701.28) (644.27) 8.8% (679.82) 3.2% (682.75) (687.21) -0.6% Gross profit 289, , % 189, % 648, , % Gross margin 27.5% 28.5% % % 24.2% - Selling expenses (122,499) (96,584) 26.8% (93,811) 30.6% (305,573) (271,585) 12.5% General and administrative expenses (27,712) (17,711) 56.5% (22,014) 25.9% (67,752) (55,277) 22.6% Operating profit before financial results 551, , % 268, % 877, , % Depreciation, amortization and depletion 154,799 86, % 113, % 347, , % Depletion tranche of biological assets 123,838 30, % 64, % 219,118 91, % EBITDA according to CVM No. 527/12 (2) 830, , % 445, % 1,444, , % EBITDA margin according to CVM No. 527/ % 37.0% % % 28.3% - Variation in fair value of biological assets (49,083) (40,027) 22.6% (29,271) 67.7% (120,933) (121,330) -0.3% Employee benefits 553 (1,632) % % 1,430 (1,234) % Non Recurring events (3) (645,866) (46,821) - (253,254) - (899,120) (49,493) 1,716.7% Adjusted and Recurring EBITDA 136, , % 163, % 425, , % Adjusted and Recurring EBITDA margin (4) 16.7% 23.4% % % 18.9% - (1) For better understanding, the net revenue per unit calculation does not consider: 3Q18: net revenue related to the sale of biological assets in the second tranche of the transaction with Suzano Papel e Celulose (-) BRL million; 2Q18: net revenue related to the sale of biological assets in the first tranche of the transaction with Suzano Papel e Celulose BRL million. (2) EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization): Measure of operational performance in accordance with CVM Instruction 527/12. (3) Non-recurring events: 3Q18: result from the sale of land of subsidiary Duratex Florestal in the second tranche of transaction with Suzano Papel e Celulose (-) BRL ; result from the sale of timber of subsidiary Duratex Florestal in the second tranche of transaction with Suzano Papel e Celulose (-) BRL ; Non recurring expenses in transaction with Eucatex (+) BRL 1.100; provision for non-recovered assets (+) BRL Q18: result from the sale of land of subsidiary Duratex Florestal in the first tranche of transaction with Suzano Papel e Celulose (-) BRL ; result from the sale of timber of subsidiary Duratex Florestal in the first tranche of transaction with Suzano Papel e Celulose (-) BRL : result from the sale of land of subsidiary Duratex Florestal (-) BRL (4) For better understanding, the Adjusted and Recurring EBITDA margin calculation does not consider: 3Q18: net revenue related to the sale of biological assets in the second tranche of the transaction with Suzano Papel e Celulose (-) BRL million; 2Q18: net revenue related to the sale of biological assets in the first tranche of the transaction with Suzano Papel e Celulose BRL million. 10

11 The result recorded in the third quarter of the year reinforces the positive recovery trend of the wood panels industry and the payback of important strategic initiatives developed on the previous quarters. The volumes sold of wood panels grew 25.0% in relation to the 3Q17, totaling a shipment of thousand cubicle meters. This increase was strongly influenced by the growing demand for wood panels in the local market, an increase in market share in a few lines of products and a good performance in foreign markets. Nonetheless, there was a slight deterioration in the mix of products, as a consequence of a greater concentration of panels sold to the manufacturers of low end furniture. Net Revenue was BRL 1,050.2 million, an increase of 61.3% over the same period last year. This figure includes BRL million regarding the sale of timber in the second tranche of the transaction with Suzano, according to the Material Fact released on February 5 th, Disregarding this non-recurring sale, the net revenue would record an increase of 25.2% compared to the 3T17. As a result, Adjusted and Recurring EBITDA was BRL million, which represents an EBITDA margin of 16.7%. The recurring EBITDA disregards the results of the sale of land and forest to Suzano. In the nine months of the year, EBITDA totaled BRL million, which represents an increase of 23.5% compared to the last year. We expect the continuity of the recovery path of the division as the level of demand continues to grow and we are able to capture the benefits of all improvement initiatives implemented in the Wood Business. Wood Division Sales Breakdown (% in 3Q18) We have noticed the continuing trend of increase in the cost of the Division, such as the hike in commodities prices and BRL depreciation. In addition, there was a lower sale of timber to third parties during the quarter due to the reduction in forest surplus. Thus, the combination of a less profitable mix of products, higher costs and lower sale of timber have driven the gross margin in the Division to 27.5%. Disregarding the effects of the transaction with Suzano, the gross margin would be 26.6% in the quarter Furniture Manufacturers Resale Civil Construction/Others Selling Expenses have increased to BRL million due to higher volumes sold and a slight increase in freight costs. Furthermore, General and Administrative Expenses also increased in the quarter, mainly due to the investments in innovation and technology and the advisory services to support strategic projects. 11

12 Deca HIGHLIGHTS 3Q18 3Q17 % 2Q18 % 9M18 9M17 % SHIPMENTS (IN 000 ITEMS) BASIC GOODS 2,111 2, % 1, % 5,937 5, % FINISHING GOODS 4,813 4, % 4, % 14,076 14, % TOTAL 6,924 6, % 6, % 20,013 19, % FINANCIAL HIGHLIGHTS (BRL1.000) NET REVENUE 406, , % 374, % 1,114,737 1,064, % DOMESTIC MARKET 384, , % 351, % 1,055,312 1,025, % EXPORTS 22,729 13, % 22, % 59,425 38, % Net revenue per unit (BRL per item shipped) % % % Cash cost per unit (BRL per item shipped) (38.39) (34.29) 11.9% (36.36) 5.6% (36.79) (33.20) 10.8% Gross profit 116, , % 101, % 304, , % Gross margin 28.5% 30.3% % % 31.3% - Selling expenses (62,019) (69,277) -10.5% (61,490) 0.9% (177,422) (194,031) -8.6% General and administrative expenses (19,590) (18,546) 5.6% (18,722) 4.6% (56,160) (50,914) 10.3% Operating profit before financial results 28,715 26, % 17, % 64, , % Depreciation and amortization 29,405 28, % 28, % 86,810 83, % EBITDA according to CVM No. 527/12 (1) 58,120 54, % 46, % 150, , % EBITDA margin according to CVM No. 527/ % 14.8% % % 17.9% - Employee benefits 1,140 (2,050) % % 1,104 (3,712) % Non-recurring events Adjusted and Recurring EBITDA 59,260 52, % 47, % 152, , % Adjusted and Recurring EBITDA margin 14.6% 14.2% % % 17.5% - (1) EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization): Measure of operational performance in accordance with CVM Instruction 527/12. During the quarter, Deca has started a recovery trend of its results, despite the still gradual pace of recovery in the building materials industry. The increase in the volumes sold suggests the beginning in capturing the benefits of several initiatives on going in the Division. Deca s volumes sold increased to the level of 6.9 million itens. The highlight of this increase was the growth in sales of basic goods lines. In comparison with the same quarter last year, there was a hike of 2.3%. Due to the price hikes, that were implement twice a year for the first time, and an improvement in the mix of products in the finishing goods lines, Deca s net revenues grew more than the growth in volumes. In the quarter, Deca recorded net revenues of BRL million, a 10.5% increase over the third quarter last year and 8.7% over the previous one. In the year-to-date comparison, net revenues grew 4.7%, reinforcing Deca s ability to react in an adverse scenario, due to its attributes of strong branding, high quality goods, strong networking with architects and construction professionals, penetration in distribution channels and an extensive after sales program. However, the division s costs remain pressured due to the hike in raw materials noticed in the previous quarters. The main commodities acquired by the division, especially the non-ferrous categories, pressured the costs of Deca s metal fittings lines of goods. In the ceramic sanitary ware lines of products, we have experienced a productivity level below the optimal one, despite a slight improvement in the quarter compared to the previous ones. Higher costs have been offset by a better mix of products in the finishing goods lines and the successful price hike in the metal lines implemented in the beginning of the quarter. This combination have driven Deca s gross margin by 136 bps up to the level of 28.5%. Even though the sales have grown, we have recorded a reduction in the selling expenses compared to the 3Q18 and 12

13 stability versus the previous quarter. As a highlight, selling fixed expenses were flat in nominal levels and there was a decrease in investments in promotion and advertising. The general and administrative expenses recorded a growth trend mainly due to greater investments in technology and innovation. Deca Sales Breakdown (% in 3Q18) 9 3 Therefore, Deca s Adjusted and Recurring EBITDA totaled BRL 59.3 million in the quarter, with an EBITDA margin of 14.6%. This figure represents an increase of 12.9% over the 3T17 and 25.6% over the 2T18. The initiatives implemented, with the support of Duratex Management System, suggested the beginning of a recovery in the Division s performance, which was below its full potential during the first half of Retail / Home Center Homebuilders Wholesale Others Ceramic Tiles HIGHLIGHTS 3Q18 2Q18 % 9M18 SHIPMENTS (IN M 2 ) FINISHING GOODS 1,501,837 1,237, % 4,000,076 TOTAL 1,501,837 1,237, % 4,000,076 FINANCIAL HIGHLIGHTS (BRL 1,000) NET REVENUE 55,433 45, % 145,433 DOMESTIC MARKET 51,365 41, % 133,538 EXPORTS 4,068 4, % 11,895 Net revenue per unit (BRL per m 2 shipped) % Cash cost per unit (BRL per m 2 shipped) (21.26) (20.88) 1.8% (20.73) Gross profit 21,952 18, % 58,057 Gross margin 39.6% 40.2% % Selling expenses (9,284) (8,478) 9.5% (25,139) General and administrative expenses (1,374) (1,817) -24.4% (4,745) Operating profit before financial results 12,574 8, % 29,274 Depreciation and amortization 1,605 1, % 4,583 EBITDA according to CVM No. 527/12 (1) 14,179 9, % 33,857 EBITDA margin according to CVM No. 527/ % 20.9% % Employee benefits Non-recurring events Adjusted and Recurring EBITDA 14,179 9, % 33,857 Adjusted and Recurring EBITDA margin 25.6% 20.9% 23.3% (1) EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization): Measure of operational performance in accordance with CVM Instruction 527/12. 13

14 The Ceramic Tiles Division s performance, which operates with the brand Ceusa, was one of the main highlights of the third quarter The increase in sales due to the recovery of volumes not shipped in previous quarters and the consistent management of operations have leveraged the results of the business. It was sold 1.5 million of square meters of ceramic tiles during the quarter, an increase of 21.4% over the previous quarter. The growth in net revenues was in line with the growth in volumes sold, totaling BRL 55.4 million, which represents a high level considering the limited production capacity of the operations. Although the Ceramic Tiles business has experienced a slight increase in costs, Ceusa was able to leverage its margins on an efficient SG&A expenses dilution. Selling expenses grew on a slower pace compared to the growth in sales and general and administrative expenses recorded a nominal reduction compared to the 2Q18. Lastly, Adjusted and Recurring EBITDA of the business division was BRL 14.2 million in the quarter, representing an EBITDA margin of 25.6%. Considering operational aspects, this was the best performance of Cusa since its incorporation on Duratex s results, which has occurred in the fourth quarter of last year, reinforcing the perceived value in the acquisition. Capital Market and Corporate Governance At the end of the third quarter of 2018, the market cap was equivalent to BRL 6.225,0 million as a result of a final share price of BRL Shareholder Structure in September 2018 (%) During this period, there were trades with our shares in the spot market of B3. It represented a trading volume of BRL million or an average daily trading volume of BRL 14.0 million Our shares are listed on the Novo Mercado, a segment of B3 that brings together companies with the highest corporate governance standards. We also have a differentiated dividend distribution policy, with a payout ratio equivalent to 30% of adjusted net income. Lastly, we adhered to the Abrasca Code of Self-Regulation and Good Practices of Publicly-held Companies Itaúsa and families Ligna and families Pension Funds Foreign Investors Local Investors Treasury 14

15 Social and Environmental Responsability In the third quarter of this year, the headcount presented stability compared to the previous quarter, ending the period with employees. Comparing to the 3T17, there was a slight increase of 2.6% in the workforce mainly due to the acquisition of Ceusa operations in the second half of (BRL '000) 3Q18 3Q17 % 2Q18 % 9M18 9M17 % Headcount (quantity) 11,443 11, % 11, % 11,443 11, % Remuneration 113, , % 112, % 336, , % Obligatory legal charges 60,772 52, % 60, % 173, , % Differentiated benefits 29,491 27, % 28, % 84,876 79, % Water consumption (m³) 7.7% 2,673,023 2,879, % 3,406, % -4.1% 3.3% 14.4% 3,264, , , ,200 96, , ,672 17,635 20, ,323 Wood panels Forest Metals Sanitary ware Hydra Ceusa Waste water disposal (m³) -14.2% 1,420,936 1,219,144 1,606, % -36.2% -27.8% -17.5% -16.1% 1,348,111 2,991 1,872 89,062 56,790 69,475 50,133 24,446 20, ,800 Wood panels Forest Metals Sanitary ware Hydra Ceusa 15

16 Total energy -3.4% 6,331,362 6,115,414 7,626, % -5.7% -3.0% -3.5% 4.2% 7,356, , , , , , ,278 24,026 23, ,179 Wood panels Forest Metals Sanitary ware Hydra Ceusa Electric energy 9.4% 1,617,691 1,770, % -5.3% -3.1% 5.8% -3.0% 2,063,510 1,909,641 2,636 2, , , , ,570 23,055 22, ,250 Wood panels Forest Metals Sanitary ware Hydra Ceusa Industrial solid waste in landfill areas -64.5% 0.9% 10,297 10,388 18, % 7, % 13,650 2, % 52.1% 4, Wood panels Forest Metals Sanitary ware Hydra Ceusa Direct emissions of greenhouse gases 43.2% 183, ,906 16

17 Acknowledgements We are grateful for all the support received from shareholders, the dedication and commitment of our employees, the partnerships we have with our suppliers and the confidence placed on us by our clients and consumers. The Management 17

18 Other financial assets CONSOLIDATED ASSETS 09/30/18 AV% 06/30/18 AV% 12/31/17 AV% 09/30/17 CURRENT 3,857, % 3,313, % 3,023, % 2,921,206 Cash and cash equivalents 1,041, % 826, % 1,074, % 918,208 Other financial assets - 0.0% - 0.0% - 0.0% 49,480 Trade accounts receivable 1,283, % 971, % 932, % 854,701 Related parties accounts receivable 19, % 40, % 35, % 35,335 Inventories 847, % 876, % 760, % 836,864 Other receivables 418, % 185, % 63, % 75,384 Recoverable taxes and contributions 175, % 162, % 138, % 128,416 Other credits 18, % 18, % 13, % 17,310 Non current assets available for sale 53, % 231, % 5, % 5,508 NON-CURRENT 6,115, % 6,174, % 6,442, % 6,111,353 Restricted deposits 54, % 53, % 51, % 51,192 Other receivables 99, % 111, % 106, % 83,201 Pension plan credits 103, % 104, % 105, % 105,428 Recoverable taxes and contributions 13, % 11, % 13, % 14,695 Deferred income tax and social contribution 304, % 319, % 313, % 252,531 Investments in subsidiaries and associates 9, % 5, % 6, % - Other investments 3, % 3, % 1, % 921 Property, plant and equipment 3,305, % 3,346, % 3,490, % 3,469,993 Biological assets 1,566, % 1,559, % 1,698, % 1,620,592 Intangible assets 655, % 658, % 655, % 512,800 TOTAL ASSETS 9,973, % 9,487, % 9,465, % 9,032,559 18

19 CONSOLIDATED LIABILITIES AND STOCKHOLDERS' EQUITY 09/30/18 AV% 06/30/18 AV% 12/31/17 AV% 09/30/17 CURRENT 1,536, % 1,159, % 1,551, % 1,407,296 Loans and financing 727, % 447, % 764, % 827,234 Suppliers 397, % 358, % 296, % 251,656 Personnel 148, % 125, % 119, % 134,979 Accounts payable 184, % 155, % 163, % 134,046 Related parties accounts payable 2, % 2, % 2, % 2,640 Taxes and contributions 75, % 70, % 143, % 56,311 Dividends and interest on capital % % 61, % 430 NON-CURRENT 3,046, % 3,331, % 3,197, % 2,947,164 Loans and financing 2,263, % 2,542, % 2,410, % 2,209,991 Contingencies 132, % 114, % 114, % 85,478 Deferred income tax and social contribution 456, % 481, % 483, % 470,660 Accounts payable 193, % 192, % 189, % 181,035 STOCKHOLDERS' EQUITY 5,390, % 4,997, % 4,716, % 4,678,099 Capital 1,970, % 1,970, % 1,970, % 1,970,189 Costs on issue of shares (7,823) -0.1% (7,823) -0.1% (7,823) -0.1% (7,823) Capital reserves 347, % 346, % 345, % 344,335 Capital transactions with partners (18,731) -0.2% (18,731) -0.2% (18,731) -0.2% (18,731) Revaluation reserves 45, % 55, % 57, % 57,812 Revenue reserves 2,557, % 2,172, % 1,980, % 1,956,457 Carrying value adjustments 521, % 505, % 416, % 402,771 Treasury shares (27,087) -0.3% (27,087) -0.3% (27,851) -0.3% (27,851) Noncontrolling interests 1, % 1, % % 940 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 9,973, % 9,487, % 9,465, % 9,032,559 19

20 CONSOLIDATED in IFRS Consolidates profit and loss statement (BRL '000) 3Q18 3Q17 VAR % 2Q18 VAR % 9M18 9M17 VAR % 3Q18 X 3Q17 3Q18 X 2Q18 9M18 X 9M17 NET SALES REVENUE 1,512,525 1,019, % 1,167, % 3,685,984 2,888, % Domestic Market 1,238, , % 928, % 2,995,910 2,403, % Foreign Market 274, , % 238, % 690, , % Biological asset 49,083 40, % 29, % 120, , % Cost of goods sold (836,479) (628,298) 33.13% (690,982) 21.06% (2,172,806) (1,845,481) 17.74% Depreciation/amortization/depletion (173,919) (104,069) 67.12% (131,773) 31.98% (403,444) (298,042) 35.36% Depletion of biological assets (123,839) (30,372) % (64,135) 93.09% (219,120) (91,834) % GROSS PROFIT 427, , % 309, % 1,011, , % Selling expenses (193,802) (165,861) 16.85% (163,779) 18.33% (508,134) (465,616) 9.13% General and administrative expenses (48,676) (36,257) 34.25% (42,553) 14.39% (128,657) (106,191) 21.16% Management compensation (4,152) (3,881) 6.98% (4,193) -0.98% (12,404) (11,564) 7.26% Other operating results, net 412,434 59, % 194, % 608,941 95, % OPERATING PROFIT BEFORE FINAN- CIAL RESULTS 593, , % 293, % 971, , % Financial revenues 47,097 49, % 39, % 105, , % Financial expenses (74,579) (79,073) -5.68% (88,509) % (224,437) (287,259) % PROFIT BEFORE INCOME TAX AND SOCIAL CONTRIBUTION Income tax and contribution - current Income tax and contribution - deffered 565, , % 245, % 851, , % (211,627) (25,617) % (98,089) % (326,510) (50,304) % 22,282 (11,948) % 19, % 48,273 16, % NET INCOME FOR THE PERIOD 376,348 83, % 166, % 573, , % 20

21 STATEMENT OF CASH FLOW PROFIT (LOSS) BEFORE INCOME TAX AND SOCIAL CONTRIBUTION ADJUSTMENTS: Depreciation, amortization and depletion Variations in the fair value of biological assets Interest, foreign exchange and monetary variations. net 3Q18 3Q17 VAR. VAR. VAR. 3Q18 X 3Q17 2Q18 3Q18 X 2Q18 9M18 9M17 9M18 X 9M17 565, , % 245, % 851, , % 309, , % 207, % 657, , % (49,083) (40,027) 22.6% (29,271) 67.7% (120,933) (121,330) -59.5% 50,303 72, % 58, % 164, , % Provisions. disposal of assets (671,393) (3,508) % 85, % (583,269) 36,404-1,944.3% INVESTMENTS IN WORKING CAPITAL (Increase)/Decrease in Assets 104,278 (90,910) % (377,986) % (377,851) (255,064) % Trade accounts receivable (292,160) (68,793) 324.7% (90,590) 222.5% (339,924) (124,897) 133.9% Inventory 40,122 45, % (85,959) % (59,742) (32,782) % Other assets 286,888 (26,475) % (282,675) % (3,490) (79,729) % Increase (Decrease) in Liabilities Suppliers 36,964 (36,948) % 51, % 91,554 38, % Personnel liabilities 23,174 18, % 19, % 28,882 45, % Accounts payable 27,243 1, % (1,297) -2,200.5% 5,836 (4,783) % Taxes and contributions (4,853) (5,412) -10.3% 15, % (80,494) (60,054) -91.9% Other liabilities (13,100) (19,471) -32.7% (4,058) 222.8% (20,473) (36,631) -64.2% Cash provided by operations 309, , % 189, % 591, , % Income tax and social contribution paid (201,749) (4,710) % (100,848) 100.1% (317,814) (16,348) 1,134.1% Interest paid (25,197) (62,811) -59.9% (36,721) -31.4% (102,296) (189,705) -86.7% CASH PROVIDED BY OPERATING ACTIVITIES INVESTMENT ACTIVITIES: 82, , % 52, % 171, , % Other financial assets - (49,171) (49,171) - Investments in fixed assets (53,205) (43,942) 21.1% (61,339) -13.3% (149,582) (138,692) -61.6% Investments in intangible assets (5,842) (1,032) 466.1% (6,693) -12.7% (15,643) (4,800) 21.7% Investments in biological assets (49,662) (41,529) 19.6% (47,278) 5.0% (140,074) (139,798) -64.5% Receipt by sale of property, plant and equipment 267, , % 393, Capital increase in subsidiaries (4,000) (4,000) - - CASH USED IN INVESTMENT ACTIVITIES FINANCING ACTIVITIES: 154,772 (135,674) % 10,671 1,350.4% 84,697 (332,461) % Financing - 4, , ,850 20,343 - Amortization of financing (23,618) (121,426) -80.5% (428,021) -94.5% (628,647) (453,600) -94.8% Interest on capital and dividends (60,773) (6,084) - Treasury shares NET CASH FLOW FROM FINANCING ACTIVITIES Exchange variations on cash and cash equivalents INCREASE (DECREASE) IN CASH FOR THE PERIOD (23,618) (117,086) -79.8% (42,257) -44.1% (298,806) (439,261) -94.6% 1,409 (450) % 5, % 9, ,945.0% 215,063 (117,317) % 25, % (32,785) (498,152) % OPENING BALANCE 826,516 1,035, % 800, % 1,074,364 1,416, % FINAL BALANCE 1,041, , % 826, % 1,041, , % 21