Citi 5 th Annual Brazil Equity Conference

Transcription

1 Citi 5 th Annual Brazil Equity Conference June

2 Disclaimer The information contained in this presentation may include statements which constitute forwardlooking 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 forwardlooking 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 forwardlooking statements, which speak only for the date on which they are made. 2

3 The Company 3

4 VCP and Aracruz Merged to Create Fibria Shareholder Structure before and after the Equity Offering (April 2012) Votorantim Industrial S.A. BNDESPar Free Float 29.42% (1) 40.16% (2) Level III NYSE 48% Bovespa 52% EQUITY OFFERING - 86 million shares issued - Unit price: R$15.83/share or US$8.43/ADR - Settlement: April 30 Average Daily Trading Volume (LTM): US$ 37 million (1) Position as of May 31, BNDESPar has 21% linked to a Shareholder s Agreement with Votorantim Industrial S.A. during the first 3 years (until October 2012) and 11% during the following 2 years (from October 2012 to October 2014). (2) Free Float 40.1% + Treasury 0.06% 4

5 Improved Corporate Governance Highlights Board and Committees Listed on Novo Mercado, highest level of Corporate Governance at BM&FBovespa Shareholders Meeting 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 Fiscal Council Board of Directors 9 Members: 20% Independent Chairman CEO Adoption of Arbitration Chamber Listed in the NYSE Listed in the most important sustainability indexes Board Advisory Committees (1) Policies approved by the Board of Directors Liability and liquidity management Executive Officers Audit and Risks Personnel and Remuneration Finance Sustainability Innovation Market risks Corporate governance Information disclosure Stock trading (1) Members performance assessed by independent consulting firm 5

6 A Winning Player Superior Asset Combination Main Figures 1Q12 LTM Pulp capacity million tons 5.25 Net revenues R$ billion 5.6 Total area thousand ha 1,077 Belmonte Veracel Caravelas Portocel Aracruz Planting area (1) thousand ha 609 Net Debt R$ billion 9.0 Net Debt/EBITDA X 5.2 Três Lagoas Pro Forma Net Debt/EBITDA (2) X 4.3 Jacareí Santos Port Terminal Pulp Unit Source: Fibria (1) As of March 30, 2012, including 50% of Veracel and excluding forest partnership areas (114 thousand ha). (2) Considers the proceeds of the Equity Offering and BPM sale in the total amount of R$1.6 billion 6

7 Modern Plants Lead to a Competitive Position in the Cost Curve Três Lagoas Mato Grosso do Sul 1.3 million t/year Jacareí São Paulo 1.1 million t/year Aracruz Espírito Santo 2.3 million t/year Veracel (1) Bahia million t/year (1) Veracel is a jointure venture between Fibria (50%) and StoraEnso (50%) with a total capacity of 1.1 million t/year 7

8 Fibria s Strategy 8

9 Clear Leadership Position Industry Outlook (1) Market Pulp Capacity Ranking 2010 (2) (000t) Recycled Fiber 228 million t Paper & Board 402 million t 57% 43% Mechanical 34 million t Pulp 174 million t 20% 80% 63% Integrated Mills 87 million t Chemical 140 million t Softwood/Other 26 million t 37% Market Pulp 53 million t 50% 50% Acacia/Other 10 million t Hardwood 27 million t 37% 63% 70% Other Eucalyptus Pulp producers: 12 million t Eucalyptus 17 million t 30% Fibria APRIL Arauco APP Georgia Pacific CMPC Sodra Stora Enso Weyerhaeuser Suzano Botnia/M-real UPM-Kymmene Domtar Ilim Mercer IP ENCE West Fraser Canfor Cenibra 5,250 Bleached Softwood Kraft Pulp (BSKP) Bleached Hardwood Kraft Pulp (BHKP) Unbleached Kraft Pulp (UKP) Mechanical (1) Paper&Board, Recycled Fiber and Pulp: RISI Market Pulp, Hardwood and Eucalyptus: PPPC Special Research Note Feb 2012 considers 2011 demand (2) Hawkins Wright January

10 Cash Cost (US$/t) Relevant Market Share and Competitive Position in the Cost Curve Fibria s Market Share (1) Average Cash Cost of BHKP delivered to Europe (2) (US$/t) 10% 19% 1000 Mill Cash Delivery SG&A Maintenance Capex 800 Financial Expenses Total Market Pulp: 52.6 million t Total Hardwood Market Pulp: 26.7 million t 0 30% Hardwood Cash Cost (US$/t) vs Capacity (mt) Total Eucalyptus Market Pulp: 17.2 million t Low Cost producers: 15mt 6.0 mt of HW market pulp with total delivered cash cost above US$500/t (1) PPPC Special Research Note Feb 2012 considers 2011 demand (2) Source: Mill Cash and Delivery: Hawkins Wright July 2011 Report SG&A, Maintenance Capex and Financial Expenses: Fibria s estimates Fibria 1Q12 figures tons 10

11 May-98 Dec-98 Jun-99 Jan-00 Aug-00 Mar-01 Sep-01 Apr-02 Nov-02 Jun-03 Jan-04 Jul-04 Feb-05 Sep-05 Apr-06 Oct-06 May-07 Dec-07 Jul-08 Jan-09 Aug-09 Mar-10 Oct-10 May-11 Nov-11 Jun-12 May-98 Dec-98 Jun-99 Jan-00 Aug-00 Mar-01 Sep-01 Apr-02 Nov-02 Jun-03 Jan-04 Jul-04 Feb-05 Sep-05 Apr-06 Oct-06 May-07 Dec-07 Jul-08 Jan-09 Aug-09 Mar-10 Oct-10 May-11 Nov-11 Jun-12 Pulp Price Historical Pulp Price FOEX BHKP Europe (US$/t) Historical Pulp Price FOEX BHKP Europe (R$/t) months 5 months US$785/t Jun 19 th Average : R$1,393/t months 3 months On December 27th, FOEX BHKP Index increased for the first time since June, indicating that Fibria s strategy to increase its pulp price in December was appropriate. 11

12 Exchange Rates and Inflation Affect the Cost Structure Exchange Rate Currencies Evolution versus Dollar (Jan 03 = 100) Real: 107% Canadian Dollar: 56% Chilean Peso: 36% Rupia: 2% Cost Structure Global producers have been impacted by: Wood: cost of land and minimum wage growth above inflation Chemicals / energy / water: global demand for commodities add pressure on main raw materials On top of that, Brazilian producers have also been impacted by: Freight: low governmental investment in infra-structure (ports, roads, etc) and higher oil prices Labor: cost in Brazil in dollar terms is higher than in some developed countries 12

13 Global Presence Fibria s Commercial Strategy Differentiation: Customized pulp products to specific paper grades Sole supplier to key customers Long term contracts Competitive logistics set up 25% N.America Miami Nyon 41 % Europe Csomád 24 % Asia Hong Kong 10 % L.America São Paulo Source: Fibria 1Q12 LTM Fibria Sales Distribution Fibria Offices 13

14 Door to Door Operations and an efficient and integrated logistics guarantee a competitive cost structure Pulp mill Outbound Logistics Forest Integrated logistics solutions Low forest to mill average distance Easy access to the most efficient transportation network: rail, barging and road Innovative shipping model Portocel: specialized port for the pulp and paper industry Client Port Sea Freight 14

15 Focus on Premium-End Uses Fibria's Pulp End Use Europe 22% 54% 22% 24% North America 24% 5% 2% 54% Asia 93% 19% Tissue Specialties Printing & Writing 42% Source: Fibria 4Q11 Earnings Results, PPPC, RISI and Fibria. 39% 15

16 Focus on Premium End-Uses Fibria's Pulp Destination Market Pulp Destination Demand Growth (CAGR) Printing&Writing 22% 43% 1% Tissue 54% 24% 4% Specialities 24% 14% 3% Newsprint 0% Containerboard 8% 5% Others 11% 3% Source: Fibria 4Q11 Earnings Results, PPPC, RISI and Fibria 16

17 Innovation and Competitiveness 17

18 Enhanced Forestry Techniques Current Elite Clone 2 years old New Elite Clone 2 years old 18

19 Forest Competitiveness Fibria : Forest Competitiveness Genetic and Technological Development at Fibria years years 8 6 years 7-8 years 7-15 years years years Brazil (eucalyptus) Indonesia S.Africa Chile Portugal / Spain Harvesting Cycle (avg. years) Yield (m3/ha/year) USA / Canada Finland / Sweden 70's 80's 90's 00's Next decade (expected) Air Dry Ton / ha / year Source: ABRAF, STCP, Poyry and Fibria. Note: Pulp trees differ depending on the country: Indonesia acacia, S.Africa tropical and temperate eucalyptus, Chile temperate eucalyptus, Portugal/Spain temperate eucalyptus, USA/Canada aspen, Finland/Sweden betula. 19

20 State of the Art Facilities Average mill capacity ( 000 tons) 2,500 Fibria (Aracruz) 2,000 1,500 1,000 Indonesia Fibria (Jacareí) Fibria (Três Lagoas) Fibria (Veracel 50%) 500 Russia USA Japan Portugal Canada Other Brazilian pulp mills Sweden Finland France/ Spain Chile South Africa China Technical age of the equipment (years) Source: PÖYRY 20 20

21 Pulp and Paper Market 21

22 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Set-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Feb-08 Jun-08 Oct-08 Feb-09 Jun-09 Oct-09 Feb-10 Jun-10 Oct-10 Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 days May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Fev-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Abr-12 May-12 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Fev-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Abr-12 Industry Outlook 87% 96% World chemical market pulp shipments to capacity 88% 83% 98% 87% 92% 102% 87% 92% 101% 88% 87% 94% 85% 82% 100% 81% 92% 102% 90% 99% 96% 90% 90% 88% 86% World Printing&Writing paper shipments to capacity 90% 85% 87% 91% 91% 88% 88% 82% 85% 87% 85% 85% 88% 84% 87% 90% 86% 87% 84% 82% 86% 87% 85% Source: PPPC World 20 Total Chemical Market Pulp Source: PPPC Global 100 World Printing & Writing Report World pulp producers' average days of supply Producer s days of supply x FOEX BHKP Europe (US$) Announced downtimes (Dec-11): - Sodra (Sweden) - Terrace Bay (Canada) 55 - April (Indonesia) Source: PPPC World 20 Inventories FOEX BHKP Europe (US$) 22

23 Commodity Price Index (CRB) European Price (US$/t) BHKP Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Abr-12 Mai-12 Industry Outlook Market pulp: world demand growth (%) China: Eucalyptus pulp shipments ('000 t) 5M2012 x 5M % 7% 2% -3% -8% -6% Total North America Europe Latin America Japan China Average 305 ktons Average 193 ktons Average 251 ktons Source: PPPC World 20 Chemical Market Pulp European Price (BHKP) x Commodity Index (CRB) Source: PPPC World 20 Chemical Market Pulp Announced List Price US$920/t Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Europe: US$ 800/t North America: US$ 860/t Asia: US$ 700/t CRB BHKP List Price Source: CRB (Commodity Research Bureau) Bloomberg BHKP: FOEX Source: RISI 23

24 Market Outlook for the Next 2 years Forecast % Annual growth Million tons /2013 Supply 23.5 ' tons % BSKP 1 Demand % Ratio 91% 93% 91% 90% 91% BHKP 1 Demand % Supply % Ratio 88% 87% 89% 87% 85% BEKP 1 Demand % Supply % Ratio 93% 90% 91% 93% 87% 1 BSKP: Bleached Softwood Kraft Pulp BHKP Bleached Hardwood Kraft Pulp BEKP: Bleached Eucalyptus Kraft Pulp Source: PPPC and Fibria 24

25 Pulp Projects Backlog Even though there is an extensive pulp projects backlog, there are important question marks regarding new projects Main Questions About Capacity Minimum required return for new projects Closures due to increasing costs worldwide, reduction of maintenance capex (higher technical age of recovery boilers) and exchange rates Fiber substitution: Softwood x Hardwood and Recycled x Virgin Fiber Main Projects Project Country Capacity Timing Status Eldorado Brazil 1.5 Mt 4Q2012 Confirmed Arauco / Stora Uruguay 1.3 Mt 2Q2013 Confirmed Suzano Brazil 1.5 Mt 4Q2013 Confirmed Fibria Três Lagoas II Brazil 1.5 Mt 3Q2014 Unconfirmed CMPC Guaíba II Brazil 1.5 Mt 4Q2014 Unconfirmed Klabin Paraná Brazil ~1.0 Mt 2015 Unconfirmed APP South Sumatra Indonesia 1.5 Mt 2.0 Mt 2015/16 Unconfirmed Suzano Piauí Brazil 1.5 Mt 2Q2016 Unconfirmed Cenibra Belo Oriente II Brazil 800 kt 2016 Unconfirmed 25

26 Financial Highlights 26

27 Liquidity Events The equity offering and other liquidity events in 2012 will contribute to reduce leverage, in line with Fibria s strategy to optimize its capital structure Liquidity Events (R$ million) Other Initiatives 225 1,565 1,340 - Losango forest base Capex: R$ 1.0 bn (2011: R$1.4 bn) -No dividends in 2012 (2011: R$264 mn) -Free cash flow in 2012 Equity Offering* BPM sale** Total * Net amount ** Net amount. Expected closing date: until June 30 27

28 1Q12 Performance 1Q12 Results Pulp Production and Sales 1Q12 4Q11 1Q11 1Q12 vs 4Q11 1Q12 vs 1Q11 Pulp production (000t) 1,332 1,299 1,319 3% 1% Pulp sales (000t) 1,313 1,408 1,259-7% 4% Net revenues (R$ MM) 1,274 1,399 1,548-9% -18% Pro Forma EBITDA 1 (R$ MM) % -38% 1,319 1,259 1,299 1,408 1,332 1,313 Production 1Q12 x 1Q11: +1% even with Veracel s scheduled downtime EBITDA margin (%) 30% 28% 39% 2 p.p. -9 p.p. Financial results (R$ MM) 192 (142) Net income (loss) R$ MM) (10) (358) Q11 4Q11 1Q12 production sales Cash Cost (R$/t) EBITDA (R$ million) and EBITDA Margin (%) 1Q12 x 1Q11: R$ 2/t reduction vs Inflation: 5.2% 39% 28% 30% Q11 4Q11 1Q12 1Q11 4Q11 1Q12 28

29 Debt Key Indicators Net Debt/EBITDA (3) (x) (R$ million) 1Q12 4Q11 1Q11 1Q12 vs 4Q11 1Q12 vs 1Q11 Gross Debt 11,031 11, % 8% (4) 4.3 Cash (1) 2,066 1,846 2,297 12% -10% Net Debt 8,965 9,478 7,959-5% 13% 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 Pro Forma Cash (1) (2) 3, ,297 97% 58% Pro Forma Net Debt (2) 7,400 9, % -7% closing average (1) Includes the hedge fair value of R$115 million negative (2) Includes the proceeds from the equity offering and BPM sale which total R$ 1.6bn (3) Last twelve months adjusted EBITDA (4) Includes the proceeds from the equity offering and BPM sale which total R$ 1.6bn Debt Amortization Schedule (R$ million) Highlights Foreign currency Local currency 7,219 - Cash position including the equity offering and BPM proceeds = R$ 3.6 bi - Cash position = 3.3x short term debt 1, Average debt maturity = 71 months

30 Liability Management 6.5 From June on, the net debt/ebitda ratio for covenant purposes will be calculated In US Dollars Net Debt/EBITDA (x) (1) Net Debt (R$ MM) Q11 2Q11 3Q11 4Q11 1Q12 Average LTM End of Period FX Rate (R$/US$) (1) including the proceeds from the equity offering and BPM sale in the total amount of R41.6 billion 30

31 Recent Developments Event Amount Conclusion Date Status Conpacel and KSR Asset Sale R$1.5 bn Jan-Feb 2011 Fibria 2021 Notes Issue US$750 mn Mar 2011 Liquidity and Liability Mgmt Policy Leverage Target (1) of x May 2011 Piracicaba Asset Sale US$313 mn Sep 2011 Equity Offering R$1.360 bn Apr 2012 Additional liquidity events (2) (1) Net debt/ebitda ratio (2) BPM and Losango asset sale 31

32 Investment Highlights Competitive Position in the Market Pulp Industry 1 Global Presence and Strong Customer Base 2 Focus on Premium-End Uses 3 Unique Forestry Management 4 Modern Industrial Plants 5 Forest to Port Integration 6 Low Production Cost DNA 7 32

33 Backup 33

34 China China s Hardwood Imports of BHKP by Country (1) China P&W Capacity Changes (3) 8,0 7,0 6,0 5,0 4,0 3,0 2,0 1,0 0,0 5,0 6,9 1,9 BHKP Total 2,8 2,3 1,9 1,4 0,7 0,7 Latin America (Million tons) 1,0 1,3 0,4 * includes Russia, China, Thailand and New Zealand 0,4 0,3 0,2 0,3 Others* Indonesia USA Canada Western Europe China's Share of Market Pulp (2) Company / Mill Effective Date '000 t Guangxi Yongkai Sugar Aug Sun Paper Sep Shandong Chenming Oct Guangxi Jindaxin Paper Oct Guangxi Tianyi Paper Mar Shandong Huatai Paper May April Mid Guangxi Yongkai Sugar Q Guangdong Guanhao Late APP 2H Total P&W capacity changes in China 3, % 22% % % 10% 9% 7% 11% 9% 14% 12% 12% 10% 16% 13% 22% 26% 16% 17% 21% 19% Eucaplyptus Hardwood Total (1) PPPC Chinese Market Pulp Demand (2) PPPC World 20 December 2011 (3) Source: TerraChoice Monthly Report Mar

35 China: a Major Player P&W Grades Expansion in China (000 tons) Increasing Tissue Consumption with Wealth Distribution +4.8 million tons until million tons until ,986 14,600 13,600 (%) of population not poor (McKinsey) (RHS) ,587 12,600 11,600 29, ,600 28,782 9,600 8,600 27,200 7,600 6,600 5,600 Production (LHS) Consumption (LHS) 50 4,600 3,600 2, Source: RISI and McKinsey, PPPC Chinese Market Pulp Demand. 1,

36 N. America W. Europe Japan Oceania L. America E. Europe China N&M East Asia Far East Africa Tissue Market Per Capita Consumption of Tissue by Region, 2010 (1) World Tissue Consumption, (1) ,5 15,6 14,6 11,2 Kg/capita Huge potential growth Average Growth Rate +3.8%a.a. Million tons 5 0 5,6 4,4 3,6 3,0 0,7 0, N.America W.Europe E.Europe L.America NME Japan China Asia FE Oceania Africa (1) RISI 36

37 Historical Ratings S&P Moody s Aracruz VCP ( ) / Fibria (2009 on) Aracruz VCP ( ) / Fibria (2009 on) 2005 BBB- N.A Baa3 N.A BBB- N.A Baa3 N.A BBB- BBB 2007 Baa2 Baa BBB BBB 2008 Baa2 Baa BB BB 2009 Ba2 Ba N.A. BB 2010 N.A. Ba N.A. BB 2011 N.A. Ba N.A. BB 2012 N.A. Ba1 Last Report Date: November 2011 / Rating: BB / Outlook: Stable Last Report Date: December 2011 / Rating: Ba1 / Outlook: Stable 37

38 Historical Ratings Hardwood (1) 93% 99% 89% 93% 91% 89% 95% 91% 90% 91% 90% 94% 93% 95% 91% 86% 88% 88% 89% Abertura Net Increase / Fechamento / Closures de (000 Capacidade tons) (000 tons) Relação Global Hardwood Oferta x Demanda Operating (%) Rate (%) Source: Fibria (1) Net Increase / closures refer to Canada, Western Europe and USA. 38

39 Investor Relations Phone: +55 (11) Website: 39