Bank of America Merrill Lynch 2018 CalGEMs Conference. June, 2018

Transcription

1 Bank of America Merrill Lynch 2018 CalGEMs Conference June, 2018

2 3 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 company s filings with the CVM and SEC. The company does not undertake, and specifically disclaims any obligation to update any forward-looking statements, which speak only for the date on which they are made.

3 Company Overview Pulp and Paper Market Financial and Operational Highlights 2018 Outlook CAPEX and Cash Cost Expansion Project Horizonte 2 Back up

4 Company Overview 5

5 (1) Controlling group (2) Free Float 41.37% + Treasury 0.13% 6 Shareholder Structure and Corporate Governance Votorantim S.A. (1) 29.42% BNDES Participações (1) 29.08% Free Float (2) 41.37% Fiscal Council General Meeting 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 25% independent members 100% independent members 75% independent members 70% independent members 20% independent members Listed on Novo Mercado, highest level at B3: Only 1 class of shares 100% voting rights 100% tag along rights (Brazilian corporate law establishes 80%) Board of Directors with minimum 20% independent members Financial Statements in International Standards IFRS Adoption of Arbitration Chamber SEC Registered ADR Level III program Policies approved by the Board of Directors: Indebtedness and Liquidity Market Risk Management Risk Management Corporate Governance Related Parties Transactions Anti-Corruption Information Disclosure Securities Trading Antitrust Genetically Modified Eucalyptus Dividend Policy Sustainability

6 A Winning Player Superior Asset Combination Main Figures 1Q18 Pulp capacity (1) million tons Net revenues (LTM) US$ billion Total Forest Base (2) thousand hectares 1,092 Belmonte Veracel Caravelas Portocel Aracruz Planted area (2) thousand hectares 656 Net Debt US$ billion Net Debt/EBITDA (in Dollars) (3) X 2.02 Três Lagoas I and II Jacareí Santos Port Terminal Pulp Unit Source: Fibria (1) Includes Horizonte 2 pulp capacity. (2) Including 50% of Veracel, excluding forest partnership areas and forest bases linked to the sales of Losango and forest assets in Southern Bahia State; As of December 31, (3) For covenants purposes, the Net Debt/EBITDA ratio is calculated in Dollars. 7

7 (1) Veracel is a joint operation between Fibria (50%) and Stora Enso (50%) and the total capacity is 1,120 thousand ton/year 8 Fibria s Units Industrial Capacity Três Lagoas Mato Grosso do Sul 3,250 thousand t/year (1)

8 9 Fibria s Commercial Strategy Revenues by Region and by End Use - Fibria Highlights Region 1Q18 Europe 33% North Am. 13% Lat Am. 10% Asia 44% End Use 1Q18 Tissue 50% 15% Specialties Printing & Writing 35% 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 Net Revenues by Region - Fibria 9% 10% 9% 10% 9% 24% 25% 24% 32% 39% 28% 24% 24% 22% 20% Focus on less volatile end-use markets such as tissue Lower dependence on volatile markets such as China Efficient logistics set up Low counterparty credit risk 100% certified pulp (FSC and PEFC/Cerflor) 39% 41% 43% 36% 32% Europe North America Asia LatAm

9 (1) Fiber Consumption, Recycled Fiber and Pulp: RISI Market Pulp, Hardwood and Eucalyptus: PPPC SRN Dec Leadership Position Industry Outlook (1)

10 11 Pulp Supply Agreement: Puma Project Puma Project Pulp volumes: Minimum of 900 kt of hardwood for the first 4 years 75% of 900 kt for the fifth year (phase out 1) 50% of 900 kt for the sixth year (phase out 2) Selling price based on the average net price charged by Fibria at the Port of Paranaguá (FOB Paranaguá) Klabin s sales volume (kt) 2Q16 3Q16 4Q Q17 2Q17 3Q17 4Q Q Sales destination: Globally, except for South America Operational startup: Mar/2016 Agreement benefits: Logistics and commercial structure synergies; Ensure sales volumes; Ensure pulp market access with Klabin brand. Logistics and commercial optimization and synergies; Support customers growth and enhance customers needs; Potential development of new customers. Mutual value creation, with better servicing for both Companies customers base

11 Pulp and Paper Market 12

12 What has been the 2017 Supply & Demand scenario? Also, compared to our forecast ** Fibria s estimates *Source: PPPC Global 100 Jan-Sep BHKP CAPACITY CHANGES ( 000 t) FIBRIA EXPECTED SCENARIO FOR 2017 AT THE END 2016 SCENARIO YTD 2017 Klabin 500 Klabin APP OKI APP OKI 1,000 Fibria TLS II 470 Fibria TLS II APRIL Kerinci APRIL Rizhao Taiwan P&P Ence Pontevedra & Navia Altri Celbi APRIL Kerinci APRIL Rizhao APRIL Jiangmen Resolute Calhoun -40 Taiwan P&P -60 Navigator Cacia Unexpected Closures and Downtime Resolute Calhoun Fibria Aracruz Unexpected Closures and Downtime Net Supply Availability BHKP demand growth** 720 1,350 Net Supply Availability BHKP demand growth** ,027* 390

13 14 and what has been the price scenario? BHKP Delivered to Europe (USD/t) Q17 2Q17 3Q17 4Q17 Annual 2017 Consultants average at the end previous year Realized PIX/FOEX price Consultants: Hawkins Wright, RISI and Brian McClay (published at the end 2016 for 2017 prices)

14 Source: PPPC Global A firm global demand but more importantly... driven by all the regions BHKP DEMAND (KT AND % CHANGE, Y-O-Y) % 19.0% 5.5% -0.2% Global NA WE China 3.3% 5.2% 5.2% 2.0% Global NA WE China 3.3% 6.2% 3.7% -3.5% Global NA WE China % 20.2% -4.4% -2.6% Global NA WE China 4.3% 11.7% 0.2% -0.6% Global NA Europe China

15 16 So, what could be next year s scenario in terms of supply and demand? FIBRIA EXPECTED SCENARIO FOR 2018 AT THE END 2017 ( 000 t) Unexpected Downtimes 2017 APP OKI Fibria TLS II Metsä Äänekoski Svetlogorsky P&B UPM Kymi Ence Pontevedra & Navia Altri Celbi Suzano Maranhão Fibria Aracruz APRIL Navigator Cacia Unexpected Closures and Downtime (Aracruz) 1,300 1,360 ~ 420 Already recorded in 1Q18 Net Supply Availability BHKP demand growth 2,930 2,950

16 New Paper capacities Worldwide F Woodfree China Rest of the World Tissue 1,535 2,380 3,525 China 1,000 1,170 1,945 Rest of the World 535 1,210 1,580 Cartonboard & Specialty 2, China 1, Rest of the World 1, Sources: Fibria and Independent Consultants 17

17 18 Why could HW demand still increase significantly in China? 1 New Paper capacities should increase HW demand by 1,375Kt kt New Tissue Machines New Woodfree Machines 2017 Q3 & Q Q1 & Q2 Total , % of HW 75% O.R. for Tissue and 90% O.R. for P&W Total: 2,435kt 1,375kt 2 3 Closures of inefficient Pulp & Paper mills might increase HW demand by 540Kt Waste paper ban imports reduction in 2018 should be around 5 million tons of Mixed Waste Paper. Let s consider that: 60% MIGHT be sourced from domestic market and improved quality through sorting coming from overseas suppliers 40% MIGHT switch to virgin pulp: 2 million tons / 1.4 = 1.4 million tons 80% benefits SW demand: 1.1 million tons 20% benefits HW demand: 300Kt Total HW demand increase in 2018 could be around 2,215 kt... Just in China!

18 Source: Fibria according to company s estimates 19 Low inventories at the Chinese Paper & Board producers Fibria Index for Paper & Board Paper & Board producers Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Fibria Index for Chemical Pulp Paper & Board producers Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Fibria Index for Pulp Changshu Jan-14 Jul-14 Jan-15 Jul-15 Jan-16 Jul-16 Jan-17 Jul-17 Fibria Index for Pulp Qingdao May-15 Sep-15 Jan-16 May-16 Sep-16 Jan-17 May-17 Sep-17

19 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 (1) Source: PPPC G100 March/2018 (2) Source: PPPC Global 100 December/2017 (3) Source: FOEX 20 Global Market BEKP Demand Shipments of Hardwood and Eucalyptus Pulp 4% 3M18 vs. 3M18 (1) 13% CAGR BEKP (2) 340Kt 4% 252Kt Total -3% -18Kt 2% 10Kt North America 5% 7% 3% 4% 3% 139Kt 149Kt 115Kt 1% 94Kt 94Kt 9Kt Western Europe China 6% Other 2,269 kt Total 8% 140 kt North America 5% 354 kt Western Europe 30% 1,337 kt China 9% 438 kt Others BHKP BEKP Hardwood inventories in days (1) 43 Avg=40 Prices (3) and Spread BHKP vs. NBSK (US$/t) Europe and China Spread (US$) Mar-17 Jun-17 Sep-17 Dec-17 Mar-18 BHKP (Europe) BHKP (China) Spread v.s. NBSK (Europe) Spread vs. NBSK (China) Price (US$)

20 Source: Poyry 21 Technical Age and Scale in the Pulp Industry Further closures are expected due to lack of adequate investments in the industry Hardwood (BHKP) Producers Integrated and Market Pulp Mills PM Capacity, 1000 t/a Aracruz Weighted average technical age 12.3 years Três Lagoas STRONG Softwood (BSKP) Producers Integrated and Market Pulp Mills PM Capacity, 1000 t/a Weighted average technical age 21 years STRONG Weighted average capacity 1,350,000 t/a Jacareí Veracel Weighted average capacity 534,000 t/a 0 30 WEAK Technical age, years WEAK Technical age, years 5 0 North American Pulp Mills Other Pulp Mills More than 6.6 million tons of capacity above 25 years and with annual capacity below 500,000 t/y.

21 Source: Poyry, PPPC, RISI and Public information. 22 Capacity closures DO happen Closures of Hardwood Market Pulp Capacity Worldwide (000 ton) ,260-1,180-1,085-1,115 Potential Additional Conversions Closures do not include temporary movements. (960 kt in 2017) (1) (1) Closures/conversion/integration 2018: April Rzhao (-500 kt), Navigator (-50 kt) and 2019: April Rizhao (360 kt).

22 More Competitive Cash Cost with H2 BHKP (US$/t) BHKP capacity ( 000 t) 1,140 1,875 1,100 2,285 4,795 3,830 16,265 TOTAL: 31, Working Capital Interest Capex Income tax SG&A USA China Canada Iberia Chile/Uruguay Indonesia Brazil Fibria 1T18 UDM Fibria w/ H2 Structural proforma Cash Production Cost (US$/t) Delivery CIF Europe Assuming WC release = 0 Sources: Hawkins Wright (Production Costs September 2017) and Fibria s 1Q18 Earnings Release. FX considered at R$/US$ = 3.12 (also assumed by Hawkins Wright). Fibria with Horizonte 2 (H2) cash production cost was estimated according to weighted average cost, after mill balance, converted at R$/US$ = Includes energy sales. Pro-forma figures are in real terms (considering IPCA inflation up to 2018). 23

23 New Capacity Investment Pipeline No major new capacity announced after OKI and H2 projects 24 Pulp prices - CIF Europe (US$/ton) (2) Aracruz Valdivia Jacarei APP Hainan Nueva Aldea Veracel Mucuri Santa Fray Fé Bentos Rizhao Três Lagoas Kerinci PL3 Chenming APP Zhanjiang Guangxi Eldorado Horizonte 2 Maranhão APP South Montes Sumatra Guaíba II (1) del Plata Klabin Oji Nantong Metsa 2,5 2 1,5 1 0,5 Capacity Additions ( 000 ton) (2) BHKP BHKP adjusted by CPI 7,400 kt 5,250 kt (1) Partially integrated production. (2) Sources: Hawkins Wright, Poyry and Fibria Analysis.

24 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Source: Bloomberg May 22, In the last 6 years, pulp volatility has been just 4%...why? 160 BHKP - FOEX Europe (base 100) CPI (base 100) Market price closer to producer s marginal cost The marginal cost producers are based in Europe and North America Flattish industry cost curve Higher flexibility to adjust supply side during imbalanced market Market end users are linked to consumer goods, such as tissue Incipient pulp price futures market and low liquidity

25 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 Lowest volatility among commodities¹ = December 31, Iron Ore Soy Bean Crude Oil Sugar BHKP - FOEX Europe Exchange Rate (R$/US$) Historical Volatility of Commodities (US$) 2 Lower than FX 14% 17% 19% 20% 22% 23% 26% 28% 28% 33% 4% BHKP FX LME Metals Cattle Copper Soy Ibovespa Iron Ore Sugar Nickel WTI Crude Oil Low volatility of hardwood pulp price, even though new capacities have come on stream during the period. (1) Bloomberg up to May 22, 2018 (2) Since December 31, 2011 up to May 22,

26 Financial and Operational Highlights 27

27 Each 5% depreciation of the Real increases EBITDA by around R$515m and FCF by R$324m (1) 2018 according to Focus Report (Brazilian Central Bank May 18, 2018) (2) 2018 according market consensus (3) Not considering the effect of Klabin sales 28 Exchange Rate Average¹ (R$/US$) Fibria net pulp price² (US$/t) Fibria net pulp price (R$/t) ,179 1,067 1,133 1,311 1, ,951 1,731 1, ,288 2,229 53% EBITDA Margin³ 40% 34% 36% 40% 39% 43% 29% 49% 51% 51% 2,371 2, ,488 1,173 1,153 1,295 1,185 1,560 1,073 1,551 EBITDA (US$ million) ² 2019²

28 Cash Production Cost (R$/t) 1Q Significant H2 contribution (74) (44) (23) (18) 32 (1) 626 US$/t 1Q17 Scheduled Downtimes 1Q17 ex-downtimes Wood Fixed Cost Dillution Energy Sales Chemicals and Energy Others 1Q18 ex-downtimes Scheduled Downtimes Utilities Results: 1Q17: R$ 9/t 4Q17: R$ 61/t 1Q18: R$ 29/t 1Q18 H2 energy surplus (MWh) 660 Cash production cost ex-downtimes (R$/t) 1Q18 vs. 4Q ( 1 ) Turbogenerators overhauls Q17 4Q17 1Q18 Avg. distance (km): 2Q17 3Q17 4Q17 Energy Sales Wood Chemicals and Energy FX/Others 1Q

29 (1) Excludes Conpacel 30 Cash Production Cost in dollars Fibria s Cash Production Cost (1) (USD/ton) Consistently controlling the cash production cost But lately, it has been influenced by non-recurring effects: Average FX (BRL/USD) LTM-1Q Wood Energy price Chemicals & Energetics

30 Net Results (R$ million) 1,824 ( 58 ) 57 ( 208 ) 1Q18 ( 620 ) ( 278 ) ( 103 ) 615 Adjusted EBITDA FX Debt MtM hedge Non-recurring effect Net Interest Deprec., amortiz. and depletion Income Taxes Others Net Income (1) 4, (233) (625) (2,205) (442) (592) 1,093 Adjusted EBITDA FX debt MtM hedge Non-recurring effects Net interest Deprec., amortiz. and depletion (1) Includes other Exchange rate/monetary variations other financial income/expense and other operating income/expenses. (1) Income taxes Others Net income 31

31 Free Cash Flow FCF (1) 1Q18 and LTM (R$ million) 1,824 1Q18 ( 516 ) ( 147 ) ( 612 ) H2 Disbursements Adjusted EBITDA 6,133 Capex (ex-h2 and Logistics Projects) ( 380 ) ( 83 ) ( 124 ) (1,199) LTM Inventories Acc. Receivables Others ( 9 ) ( 10 ) (57) Net Interest Working Capital Income Taxes Others FCF ( 2,135 ) ( 884 ) (1,531) ( 36 ) ( 5 ) 1,542 Adjusted EBITDA Capex (ex-h2 and Logistics Projects) Net Interest Working Capital Income Taxes Others FCF (1) Not considering Horizonte 2 capex (1Q18: R$ 113 mn LTM: R$ 1,775 mn), pulp logistics projects (1Q18: R$ 158 mn) LTM: R$ 201 mn) and dividends payment (LTM: R$ 395 mn). 32

32 1Q18 Indebtedness Gross debt and Cash position (million) Net debt (million) and Leverage 19,299 18,922 H2 CRA Gross Debt 5,834 5,693 H2 CRA H2 CRA H2 CRA Cash Position 6,968 6,148 CRA CRA 2,106 1,850 Net debt/ebitda (R$) Net debt/ebitda (US$) 2.49x 2.08x 2.41x 2.02x 12,331 12,774 3,728 3,843 Dez/17 Mar/18 Dez/17 Mar/18 Dez/17 Mar/18 R$ US$ R$ US$ R$ US$ Interest expense/revenue (US$ million) and Interest coverage (2) LTM Interest gross expense Interest on financial investments 4.6 Interest Cost coverage of debt (x) 4.6 (2) Cost of Debt in US$ (1) and debt maturity Q17 4Q17 1Q18 Average Cost of cost debt in US$ (% a.a.) Average maturity (in months) (1) (1) Considering the portion of debt in reais fully adjusted by the market swap curves at the end of each period (2) LTM 3.4 EBITDA/LTM 3.3 net interest (1) excludes capitalized interest effect 33

33 (1) Refer to note 7 cash and cash equivalents in 4Q17 Financial Statements 34 Agribusiness Credit Receivable Certificates (CRAs) CRA accounted for 25% of the total debt The largest CRA issuer in Brazil (R$ 4,915 million; Av. cost 98%) %CDI 106% 104% 102% 100% Av. interest rate of financial investments (1) R$ 941 million 98% 96% 94% 92% R$ 675 million Tenor: 6 y Oct, 15 R$ 880 million Tenor: 7 y Jun, 16 R$ 470 million Tenor: 7 y Jun, 16 R$ 374 million Tenor: 7 y Aug, 16 R$ 326 million Tenor: 4 y Aug, 16 R$ 1,250 million Tenor: 7 y Dec, 16 R$ 757 million Tenor: 5 y Sep, 17 R$ 184 million Tenor: 6 y Sep, 17 90% 88% 86% 84% 82% R$ 675 million- (15/oct) R$ 880 million- 1 tranche (16/jun) R$ 470 million- 2 tranche (16/jun) R$ 374 million- 1 tranche (16/aug) R$ 326 million - 2 tranche (16/aug) R$ 1,250 million- (16/dec)

34 Robust Liquidity USD million 30, 2018) (3) Capex to be disbursed (cash) related to Horizonte Liquidity (1) and debt amortization schedule (US$ million) Pre-payment BNDES NCE Bonds Finnvera CRA and others Revolver 2, Cash (1) 1, Liquidez Capex H2 (2) : 119 (1) Not including US$ 46 million related to MtM of hedging transactions. (2) Financial execution of US$ 2,086 million (cash) capex up to Mar/2018. FX (R$/US$) Horizonte 2 Funding (US$ billion) 3Q Q Q Q Q Q Q Horizonte 2 Project US$ 2.2 bn Pre-payment CRA BNDES FDCO ECA Working capital (4) Total

35 Financial Strategy Focusing on liability management Market Scenario Goals Amortization concentrated in 2019 Balance and extend the debt repayment schedule Higher volatility in 2018 combined with the current market opportunity for funding in US$ Ensure low average cost of debt Exclude financial covenants Initiate reduction of gross debt using US$ 200 million cash Amortization schedule (as-is) US$ mn 2017) 957 BNDES Bond PPE EPP Finnvera NCE ARC Finame Others BNB

36 Financial Strategy to further improve indebtedeness profile 37 Amortization schedule (to be: EPP + Bond) US$ mn (@Sept. 2017) BNDES Bond EPP PPE Finnvera NCE Others Outros CRA ARC Finame Agência FCO, FINEP de Fomento and FDCO(FCO, Finep e FDCO) BNB US$ 1.5 bn export pre-payment to be paid in advance, with: Cost of debt in US$ and Debt Maturity¹ US$ 0.6 bn new bond due 2025 (coupon rate 4.00% p.a.) + US$ 0.7 bn new Export Pre-Payment + US$ 0.2 bn cash use Average cost in US$ (% p.a.) Average maturity (in months) As-is To be 1) Considering the portion of debt in reais fully adjusted by the market swap curves

37 WAIVER ON 4.5X COVENANT WAS EARLY NEGOTIATED Horizonte 2 start-up in 3Q17 boosts EBITDA and FCF generation (1) As stated on the Liquidity and Indebtedness Policy and Shareholders Agreement 38 Initiatives for Leveraging Management Net debt / Ebitda (USD) H2 Start-up US$854 MM initiatives mapped US$220 MM implemented during the expansion cycle. Working capital release Actual (in US$) Covenant level Waiver , x Indebtness limits (1) 2.0x 2.5x 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q Leverage guidelines Range of 2.0x to 2.5x net debt/ebitda Maximum 3.5x net debt/ebitda during expansion cycles Highlights Covenants only triggered if Fibria loses the Investment Grade by 2 of the 3 rating agencies During the most critical periods of expansion, 4.5x covenant was waived

38 (1) Fibria s historical data in BRL. The period in bold represents companies expansion capex execution. 39 Net Debt/EBITDA (R$) (1) Dividends and interest on equity paid during expansion projects: Fibria R$ 2,840 MM 8.1 Suzano R$ 222 MM Puma 6.3 Klabin R$ 741 MM Maranhão Horizonte Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 Fibria Suzano Klabin Eldorado Lowest leverage peak during the largest expansion project in LatAm with the lowest cash production cost and lowest cost of funding

39 (1) G-spread on May 18, One of the best performances among Brazilian corporate issuers (1) Historical G-spread (bps) Rating BBB- BBB- Outlook Stable Stable Fibria % Fibria % Fibria % Fibria % Issuance with maturity in 2024 Issuance with maturity in

40 ROE and ROIC (R$) ROE = Adjusted EBIT (1) / Equity before IAS 41 (2) and ROIC = Adjusted EBIT (3) / Invested Capital before IAS 41 (2) ROE ROIC 30.8% 25.1% 21.5% 3.4% 4.7% 5.7% 6.1% 6.2% 5.6% 15.6% 9.8% 6.9% 15.0% 8.6% 12.6% 12.8% Q18 Fibria after H2 Structural (pro-forma) Average FX (R$/US$) (4) Average Net Pulp Price (US$) (5) (1) Adjusted EBITDA CAPEX Net Interest Taxes (2) International accounting standards for biological assets. (3) Adjusted EBITDA CAPEX Taxes (4) FX for H2 cash cost and sustaining capex (5) Fibria s actual net realized pulp price average last 3 (6) Considers the cost structure presented on slide 27 and 4Q17 balance sheet (invested capital and equity) 41

41 ROIC and ROE Fibria s case going forward 42 Horizonte 2: capacity increase, cash cost lower than expected, efficient ramp-up with high energy surplus Deleveraging and interest expense/ton reduction Pulp price: up to 2021 without any significant capacity we have not seen such positive scenario since late 1990s and early 2000s Wood cost: despite pressures, wood cost reduction moves towards structural level FX upside risk more than downside risk Sustainability: listed in the Dow Jones Sustainability EM Index and B3 Corporate Sustainability Index (ISE)

42 2018 OUTLOOK CAPEX AND CASH COST 43

43 Fibria CAPEX 2018 BRL million H2 capex (cash basis - R$ million) 1, Sustaining 2, Sustaining 2,787 US$108/t (2) US$111/t (2) Original 2018 Capex Modernization Others Industrial Sustaining Pulp Logistics Land Acquisition Reviewed CAPEX 2018 Industrial Sustaining Forest Renewal Others Modernization H2 Pulp Logistics Land Acquisition Original CAPEX US$1,066 mn (1) Reviewed CAPEX US$1,117 mn (1) (1) 2018 average FX - BRL/USD 3.46, according to Focus Report (Brazilian Central Bank May 25, 2018) (2) Nominal Capacity of 7,250 kt. 44

44 Structural CAPEX BRL million 2,880 2,285 USD 832 M (1) USD 660 M (1) 2018 Guidance (sust+moderniz) Non-recurring wood purchase Modernization Non-recurring projects / SSMA Turbogenerator overhaul Others Structural capex (includes TLS 2) USD115/t USD91/t (1) 2018 average FX - BRL/USD 3.46, according to Focus Report (Brazilian Central Bank May 25, 2018) 45

45 Cash Cost (USD/t) BRL/USD (27) (19) (10) LTM 3Q17 Horizonte 2 Project Wood cost reduction Modernization Payroll tax Structural cash-cost FX Sensitivity 90% 100% 12% % 71% 75% 49% 24% FX Cash cost (US$/t)

46 Expansion Project Horizonte 2 47

47 48 What is the importance of growth for Fibria? Wider fixed costs dilution Competitiveness Cost curve position improvement Greater bargaining power with suppliers Follow the growth of strategic customers Commercial positioning Developing new customers Distribution to new geographic markets Efficiency and competitiveness gains in logistics Higher quality in customer service Long-term growth potential Greater ability to capture new expansion market windows Strong M&A position

48 HORIZONTE 2 PROJECT Site Overview Start-up brought forward: about 2 months ahead of schedule Expansion Capex of US$2,193 million (US$1,124/t) Inside the fence (1) Capex of US$ 947/t Energy Surplus 130 MWh Cash production cost US$116/t (@R$/US$3.38) (1) Industrial capex

49 Nominal Capacity ( 000 t) 8,030 8,100 8,150 8,150 8, ,830 1,900 1,950 1,950 1,950 5,300 5,300 5,300 5,300 5, ESTIMATED MARKET BHKP CAPACITY RANKING 2017 (000T) Fibria 8,150 APP & Paper Excellence Suzano April CMPC UPM Arauco Stora Enso Cenibra Ence Altri Marubeni Mondi Ilim Nippon Oji Metsä Navigator Woodland Georgia Pacific Verso Resolute Lwarcel International Paper Klabin Soedra Domtar Klabin's Puma Project ('000 t)(1)¹ Horizonte 2 ('000 t)¹ Current Production ('000 t) Current Capacity New Capacity New Capacity Klabin Agreement New Capacity Horizonte II Project Source: Poyry and Fibria (Nov 2017) (1) The volumes in 2018 will depend on the learning curve of the plants. The agreement with Klabin may be renewed by mutual consent. 50

50 Pulp sales destination: Fibria growing where the market grows 32% 32% 19% 19% 40% 39% 9% 10% Past revenue distribution (1) Total sales volume distribution after H2 start up (LTM) (2) (1) Considers LTM 1Q18 (2) Includes Klabin s sales volume 51

51 Horizonte 2 Forestry Base Forestry base secured as planned TOTAL TRÊS LAGOAS UNIT FOREST BASE: 308,000 ha HORIZONTE 1 FOREST BASE: 121,000 ha HORIZONTE 2 FOREST BASE: 187,000 ha ALREADY PLANTED (97%): 181,867 ha Average distance from forest to mill H1 + H2 up to 100 km 52

52 Logistics Integrated logistics - outbound and shipping 53 Mato Grosso Goiás Brasília Mato Grosso do Sul Railway export corridor with high reliability and capacity Less transit time from mill to the Port of Santos Higher productivity per train With T32, Fibria becomes the pulp player with the highest storage capacity in Port of Santos Port Terminal 32

53 HORIZONTE 2 CAPEX Disbursement flexibility and reduction from 2015 (1) As of Mar , (478) (453) (184) 56 6, ,345 6,214 1,131 To be disbursed Initial budget (May 2015) Capacity increase Contingencies Savings Indirect costs Change of scope Updated (in real terms) Payment negotiation Inflation FX December 2017 Budget US$2.8 bn R$/US$=2.80 R$/US$=3.34 US$2.2 bn Cash Capex (R$ million) (1) To be disbursed Executed Breakdown by currency 1, Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 21% 4% 75% US$ million BRL EUR USD

54 Horizonte 2 project assumptions Unit R$ US$ Avg previous projects (7) Expansion capex (1) $ billion Expansion capex (1) $/t 3,767 1,124 Inside the fence capex $/t 3, Sustaining capex (2) $/t Cash production cost (3) $/t All in cash cost (estimated) (4)(6) $/t Pulp price (5) $/t Free cash flow (estimated) (6) $/t Payback period (estimated) years (1) Includes chemical leasing 3.35). Previous peers projects multiplied by 1,950,000 tons to make the information comparable. (2) Estimated sustaining capex in after mill balance 3.38). (3) Estimated weighted average cost, after mill balance. Includes energy sales 3.38). Figures are in real terms (considering inflation up to 2018). (4) Cash cost + freight + SG&A + Sustaining Capex + Interest + taxes 3.38) Assuming working capital = 0. (5) Actual Fibria s net realized pulp price average last 3 years. (6) Note: All in cash cost and free cash flow figures assumes working capital = 0, delivered to Europe and is based on the estimations already presented in Fibria s previous public materials. (7) According to RISI, considering the average of the BHKP projects since 2009 in Latam the average excludes H2 figures. 55

55 Pulp price (US$/t) Free cash flow H2 Project (US$/t) FCF/t from net pulp price (US$/t) (1) FCF/t (2) sensibility to net pulp price and FX FCF (US$/t) 443 Payback 2.5 yrs yrs 3.9 yrs yrs 6.6 yrs 450 Last 3 yrs Fibria's pulp price Cash cost Freight delivery to Europe and SG&A EBITDA Sustaining capex Interest Income taxperpetuity after tax FCF shield 400 1,50 2,50 3,50 4,50 5,50 FX (R$/US$) (1) 3.38 and assuming working capital = 0. (2) Size of the bubble = FCL/t in US$ 56

56 H2 cash production cost decrease Accumulated benefit per year (US$/t) Why so low? 90% 100% US$116/t cash cost (1) Wood competitiveness (distance forest-mill): Current Fibria: 328 km Structural Fibria: ~166 km H1+H2: up to 100 km Energy surplus: Current Fibria: ~70 MW Structural Fibria: 200 MW H2: 130 MW Synergies with Line 1 fixed cost dilution Automated nursery 12% High technology and scale (1)

57 58 Final Remarks Economies of scale Synergies with current operations Wood availability and low distance from forest to mill Fibria s total energy surplus to be increased by 130 MWh Cash cost competitiveness Meet customers demand growth Attractive returns even in adverse scenarios of pulp price and BRL Solid financial profile

58 A winning strategy So far, better than expected 59 Digester feeding Actual Expected 23/08/17 23/11/17 23/02/18 Inspection Downtime Inspection Downtime From Mar. 28 th to 31 th Actual Expected (status: March 28, 2018) 1,008 k tons 845 k tons +19% Learning curve: 100% on may 21 st 5.5 k/t day

59 BACK UP 60

60 61 Forestry operations productivity Transportation Maritime Wood Shipping Project PROJECT DESCRIPTION (ARACRUZ UNIT) Capex and Opex reduction; Increase in cargo handling due to increase in stack height volume Reduction in heavy truck road traffic Capex: R$ 54 million (accomplished in 2016) Start-up: Sep/2017 Saving OPEX: R$ 24 million/year

61 Third-party wood ¹ (%) Third-party wood reduction Non-recurring pressure decreasing towards the structural level % Planting 34% 63% 73% 67% 68% 75% 72% 84% 87% 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Average distance from forest to mill Third-party wood Average distance from forest to mill ¹ (km) In 2016 climate change materialized in the most severe rain shortage in Aracruz forestry base in the last 40 years, but in 2017 Rain volumes in Aracruz region improved, more close to historical average Higher productivity was obtained in Jacareí and Três Lagoas forestry bases Forest productivity long term goal (MAICel) achieved adt/ha/year for the new eucalyptus clones effectively planted in 2017 Total NPV (2) : R$ 3.5 billion (US$ 1.1 billion) (1) Includes Veracel (2) BRL/USD

62 63 Industrial: maintenance downtimes schedule change Mills - capacity Aracruz A kt Aracruz B kt Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 No maintenance downtime No maintenance downtime Aracruz C kt Jacareí kt No maintenance downtime Três Lagoas L kt No maintenance downtime Três Lagoas L kt Veracel (1) kt No maintenance downtime 12 months 15 months (1) Veracel is a joint operation between Fibria (50%) and StoraEnso (50%) and the total capacity is 1,120 thousand ton/year Regulatory Standard 13 (Boiler and Pressure Vessel Inspection) extended the maximum period between recovery boiler inspections from 12 to 15 months. Fibria was the first company to use the extended period benefit NPV: R$385 million

63 Mar-13 May-13 Jul-13 Aug-13 Oct-13 Dec-13 Mar-14 May-14 Jul-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jul-15 Sep-15 Nov-15 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Global Market BHKP/BEKP Demand W20 Mar/2018 Shipments of Hardwood and Eucalyptus Pulp 4% 214Kt 6% 285Kt -13Kt -2% 4% 15Kt 3M18 vs. 3M17 (1) BHKP 3M Shipments (1) ( 000 t) 8% 11% 181Kt 162Kt 1% 5% 3% 1% Kt 75Kt 52Kt 14Kt +3.5% Total North America BHKP Western Europe BEKP China Other 3M/13 3M/14 3M/15 3M/16 3M/17 3M/ Hardwood inventories in days (1) 43 Avg=41 China BHKP 3M Shipments (1) ( 000 t) +0.7% M/13 3M/14 3M/15 3M/16 3M/17 3M/18 (1) Source: PPPC W20 Mar/

64 Source: RISI conference, August Global Market Pulp Demand Hardwood demand will continue to increase at a faster pace than Softwood Hardwood (BHKP) vs. Softwood (BSKP) (000 ton) CAGR: Hardwood: +3.04% Softwood: +1.24% Demand growth rate 000 ton Growth Growth Hardwood % 42% Eucalyptus % 58% Softwood % 16% Source: PPPC report (May 2017) Hardwood Softwood Market Pulp % 30% Source: PPPC reports. Excludes Sulphite and UKP market pulp (Nov./16) Paper Production Runnability with BHKP

65 Benefiting From China s Growth ( 000s t) 12,137 10,751 BHKP Total China s Hardwood Imports of BHKP by Country (1) 6,567 6,159 Latin America (1) ,846 2,193 1,904 2,068 Latin America is the leading exporter of BHKP to China, accounting to approximately 54% of China's total imports in Indonesia Others(2) USA Canada Western Europe (1) includes South Africa and New Zealand. (2) Includes China, Japan, Malaysia, Russia, Thailand and Vietnam. (million t) World Tissue Consumption, (3) Annual Growth Rate +3.7% N.America W.Europe E.Europe Japan China Asia FE Middle East LatAm Africa Oceania 35% 30% 25% 20% 15% 10% 5% 0% 10% 10% 12% 14% China's Share of Market Pulp (2) 21% 17% 22% 23% 23% 24% 25% 26% (million t) 16 29% 14 Eucalyptus Hardwood Total % Compared to the global Market Pulp (1) PPPC Pulp China Flash Report Dec/2017 (2) PPPC W20. Coverage for chemical market pulp is 80% of world capacity (3) RISI Per Capita Consumption of Tissue by World Region (3) (Kg/capita/year) N. West America Europe 11.2 Japan Oceania East Europe 0.6 LatAm China Africa 66

66 E 2018E 2019E 2020E E 2018E 2019E 2020E Global Paper Consumption CAGR Developed Markets: - 2.1% Emerging Markets : + 5.6% CAGR Developed Markets: - 3.1% Emerging Markets : + 0.9% 103, , ,758 99,977 P&W Consumption (000 tons) (1) Developed Markets CAGR Developed Markets: + 1.5% Emerging Markets : + 6.6% Emerging Markets CAGR Developed Markets: + 1.4% Emerging Markets : + 5.9% 41,712 30,357 20,979 Tissue Consumption (000 tons) (1) Developed Markets Emerging Markets Source: RISI 67

67 mai-10 jul-10 set-10 nov-10 jan-11 mar-11 mai-11 jul-11 set-11 nov-11 jan-12 mar-12 mai-12 jul-12 set-12 nov-12 jan-13 mar-13 mai-13 jul-13 set-13 nov-13 jan-14 mar-14 mai-14 jul-14 set-14 nov-14 jan-15 mar-15 mai-15 jul-15 set-15 nov-15 jan-16 mar-16 mai-16 jul-16 set-16 nov-16 jan-17 mar-17 mai-17 jul-17 set-17 nov-17 jan-18 mar-18 BHKP prices - CIF China (US$/ton) Shipments (000 ton) Benefiting From China s Growth Source: PPPC Global 100 March 2018 ( 000s t) China: Eucalyptus pulp shipments 900 BHKP Price Shipments average: 250 ktons 2011 Average 379 ktons 2012 Average 370 ktons 2013 Average 439 ktons 2014 Average 504 ktons 2015 Average 531 ktons 2016 Average 612 ktons 2017 Average 683 ktons 68

68 Source: Pöyry. USD/Adt, 2013 cost level 69 Global BHKP Market Pulp Supply Cost Curve COST CURVE EVOLUTION Cost position of marginal producer Cumulative Capacity Million t/a

69 Tightening plantation wood and chip supply could add to the cash cost of Asian pulp mills Source: Pöyry. USD/Adt, 2013 cost level 70 Cumulative Capacity Million t/a

70 Growth in Asia is empowered by urbanization and increasing disposable income Source: Pöyry. 71

71 Source: Pöyry. 72 The share of non-wood pulp will decline

72 Current Zero Cost Collars (1) Zero Cost Collars: No leverage No margin call No threshold CETIP registered 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 Total Notional US$ 265 MM US$ 685 MM US$ 710 MM US$ 490 MM US$ 225 MM US$ 80 MM US$ 15 MM US$ 2,470 MM Strike Put Strike Call FWD (1) As of May 22,

73 Free cash flow (1) Positive quarterly FCF in the last 5 years, even during appreciated FX FCF (USD million) Nominal Capacity ( 000 t) 5,300 7, Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 EBITDA Margin 37% 41% 39% 39% 41% 42% 41% 35% 35% 45% 50% 50% 56% 54% 52% 43% 43% 36% 37% 45% 49% 57% Average FX Average Net Price (1) Excluding H2 Project, dividends, pulp logistics and land purchase effects. 74

74 Fibria s tax structure Description and Amount¹ Maturity (a) EBT (-)(b) Goodwill (Aracruz acquisition) As stated in the income statement - Annual tax deduction: US$ 27 million (tax) - Remaining Balance Mar/18: US$ 74 million (base) Feb/2019 (-)(c) Forestry Capex in MS state (net) (+/-)(d) Exchange variation (cash) 2018 tax deduction related to depletion: US$ 9.6 million Undefined (+/-)(e) Other Tax base before compensations (f) (-) Tax loss carryforward (a) + (b) + (c) + (d) + (e) - Up to 30% of tax base before compensations - Balance up to Mar/18: US$ 238 million (base) Undefined (g) Tax base Tax base before compensations tax loss carryforward (f) (h) Income tax Tax base (g) * 34% (i) (-) Federal tax credits Cash Tax Balance Mar/2018: - PIS/COFINS: US$ 199 million - Withholding tax (IR and CSLL): US$ 375 million - Reintegra: US$ 67 million Income Tax (h) tax credits (i) Undefined TAX PAYMENT 2 (cash basis) US$ 9 million US$ 2 million US$ 8 million US$ 14 million US$ 12 million (1) Considering BRL/USD of March 31, 2018 (2) Considering average FX for the period US$ 23 million US$ 36 million US$ 12 million US$ 3 million 75