FACT SHEET 4Q17 CORPORATE GOVERNANCE. MARKET CAP (12/31/2017) BRL 6,341.6 million CLOSING SHARE PRICE ON 12/31/2017 BRL 9.20

Transcription

1 FACT SHEET 4Q17 MARKET CAP (12/31/2017) BRL 6,341.6 million CLOSING SHARE PRICE ON 12/31/2017 BRL 9.20 NUMBER OF SHARES IN ISSUE ATE THE END OF DECEMBER 691,784,501 TREASURY SHARES 2,478,659 FREE FLOAT 40% Duratex investor relations Investor Relations Officer: Carlos Henrique Pinto Haddad Executive Manager: Guilherme Setubal Souza e Silva investidores@duratex.com.br Teleconference/Webcast: February 6th,2018, tuesday Portuguese: Time: 10:00 am (BR time; 7:00 a.m. NYT) February 6th, 2018, tuesday English: Time: 11:00 am (BR time; 8:00 a.m. NYT) 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 Self-regulation 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, Santander. To connect: Participants in Brazi: or Participants in USA: Toll free: or (English only) Access code: Duratex Web conference: For those unable to accompany 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 BRL '000 4Q17 4Q16 % 3Q17 % % HIGHLIGHTS Volume shipped Deca ( 000 items) 6,224 5, % 6, % 26,053 24, % Volume shipped Deca ( 000 m 2 ) 531, , , Volume shipped wood (m 3 ) 671, , % 614, % 2,399,134 2,433, % Consolidated net revenue 1,102,632 1,028, % 1,019, % 3,990,866 3,909, % Gross profit 369, % 296, % 1,143,769 1,009, % Gross margin 33.5% 25.8% % 28.7% 25.8% EBITDA according to CVM No, 527/12 (1) 279, , % 295, % 986, , % EBITDA Margin CVM No, 527/ % 28.1% 29.0% 24.7% 23.0% Adjustments for non-cash events (93,915) (44,041) 113.2% (43,709) 114.9% (220,191) (161,090) 36.7% Non-recurring events 42,906 (28,146) (46,821) % (6,587) (59,133) Recurring and adjusted EBITDA (2) 228, , % 204, % 760, , % Recurring and adjusted EBITDA margin 20.8% 21.1% % % 17.4% - Net income 84,618 25, % 83, % 185,015 26, % Recurring net income 112,936 6, % 52, % 180,668 (12,966) % Recurring net margin 10.2% 0.6% - 5.1% 4.5% -0.3% - INDICATORS Current ratio (3) % % % Net debt (4) 2,100,460 2,040, % 2,069, % 2,100,460 2,040, % Net debt/ebitda LTM (5) % % % Average net equity 4,697,209 4,570, % 4,637, % 4,625,991 4,563, % ROE (6) 7.2% 2.2% - 7.2% - 4.0% 0.6% - Recurring ROE 9.6% 0.6% - 4.5% - 3.9% -0.3% - SHARES Basic net earning per share (BR) (7) % % % Closing share price (BRL) % % % Net equity per share (BRL) % % % Shares held in treasury (shares) 2,478,659 2,485, % 2,478, % 2,478,659 2,485, % Market Value (BRL1,000) 6,341,614 4,687, % 6,527, % 6,341,614 4,687, % (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) Current liquidity: Current Assets Divided by Current Liabilities. Indicates the amount available in BRL to cover each BRL of short-term obligations. (4) Net Indebtedness: Total Financial Debt ( ) Cash balance. (5) Financial leverage calculated on the rolling EBITDA over the last 12 months, adjusted for events of a purely accounting and non-cash nature. (6) ROE (Return on Equity): measure of performance obtained by taking the annualized Net Earnings over the period, annualized, and dividing by Average Net Equity (7) 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 & Business Scenario The fourth quarter of 2017 has brought the consolidation of economic recovery in Brazil, reflecting positively on our operations. Inflation below the target s lower band, along with the downward path of interest rates and the return of credit and consumption have provided the necessary foundations for the recovery of activity in the Wood and Deca divisions. One of the propellers behind the return of activity in our business has been the recovery of demand, driven mainly by an increase in consumption by part of Brazilian families which, after undergoing a tough period of deleveraging, have now started to take credit once again. The Brazilian Institute for Geography and Statistics (IBGE) has registered a net increase of 9.8% in the consumption of furniture and electric appliances up to November, after two consecutive downturns in 2015 and In the wood panel segment, the Brazilian Institute of Trees (Instituto Brasileiro de Árvores - IBÁ) has registered an increase in domestic demand of 13% in the fourth quarter and 4% in the year. The demand in the foreign market has increased 21% in the year and 6% in the quarter. The demand for wood panels has grown 6% in the year when considering both domestic and foreign markets. The Brazilian Institute of Construction Materials (Associação Brasileira da Indústria de Materiais de Construção - ABRAMAT), which is responsible for measuring evolution in the construction sector, points towards a fall in revenues of 4% in the year, in line with their projections, and a decrease of 5.7% in employment within the industry. The institute estimates a discreet growth of 1.5% in 2018, which is in line with our assumption of gradual recovery in demand. The Brazilian economy is expected to stabilize in 2018, and GDP to grow at 2.66%, according to the average of estimates in the FOCUS report published by the Central Bank on 01/26/2018. We remain cautiously optimistic with the recovery of our sectors of activity which have been negatively impacted by the political and economic crises of the past few years. Strategic Management & Investiment Total investments closed the year at BRL 82.6 million within the last three months of the year, of which BRL 39 million have been directed to forest OPEX and BRL 43.6 million to maintenance and projects. In 2017, investments have represented BRL million, below our original estimate of BRL 420 million. This result illustrates Duratex s commitment to maximizing cash generation and financial deleveraging. The results of recently acquired Ceusa, a reference in the ceramic tile sector, have been consolidated into Duratex in October, after CADE s- Conselho Administrativo de Defesa Econômica approval. As previously disclosed, Ceusa was acquired for BRL 280 million and marked the Duratex s entrance into the ceramic tile sector, thus complimenting the Company s solution portfolio. We expect to integrate operations and to start capturing synergies, thus further leveraging the businesses returns, in One of the highlights of 2017 was the consolidation of the Duratex Management System (Sistema de Gestão Duratex SGD), encompassing all of the company s efforts in terms of gains in efficiency, productivity, cost management and asset returns. An office with a dedicated team was created specifically for the management and dissemination of this project, besides the structuring of a methodology to measure progress. The P100, an initiative promoted in the second quarter with the purpose of cutting costs and offsetting the slow economic recovery, closed the year with a saving of BRL 76 million. Although this result is lower than the one originally intended, it is reflective of the Company s commitment to a more effective cost management. The Company has reached an important landmark in its journey towards cultural transformation, where all leaderships have been capacitated. It has been two years since we embarked on this transformation, and one can already take notice of a more rejuvenated and innovative company, ever committed to the return of its operations. In addition, we completed the assessment of Great Place to Work s, and were recognized for our good environment for employees, in their opinion. Regarding the next periods, the commitment and accountability of everyone, especially the leadership, is going to be fundamental in encouraging the development of teams in terms of performance and behavior, thus ensuring Duratex s prominence in its sectors of activity and as an employer. 3

4 We have disclosed on January 31, 2018, as a subsequent event, the sale of installations and machinery dedicated to the production of Thin Wood Fiber Boards (hardboard) located in the city of Botucatu. The evolution of the wood panel market in Brazil, and the decision to resume activities in the Itapetininga unit, has made these lines, which are directed mainly towards exports, small within Duratex s portfolio of solutions. This product has therefore lost relevance within the Company s strategy that is being redirected towards products with a larger added value. The transaction refers to the swap of installation and equipment for a production farm located in the city of Capão Bonito, in the State of São Paulo, strategically closer to our unit in Itapetininga, at the base amount of BRL 60 million. The remaining lines of Thick and Thin Wood Fiber Board (MDF and HDF) continue to be operated as usual by Duratex. As legally required, this operation is being forwarded to CADE and will be finalized as soon as approval is received. The management of these lines remain with Duratex in the regular production standards for the time being. Being the search for higher returns and greater efficiency central objective in our strategy, we have announced on February 5th, 2018, the sale of land and forests located in the the state of São Paulo to Suzano Papel e Celulose. The evolution of forest management and technology within the last six decades has allowed the Duratex to increase its productivity, and therefore, to hold a volume of land and forests that exceeds the current and projected needs of its wood panel factories. In line with the permanent search for better return on its assets, Duratex has opted for the sale of such exceeding assets. The transaction foresees the sale of land and forests in the the central region of the state of São Paulo, and is structured in two parts, being: i) Acquisition of about 9,500 (nine thousand five hundred) hectares of rural property and forests in the total value of BRL million. (ii) Exclusive option for Suzano to purchase an additional 20,000 (twenty thousand) hectares of land and forests in the total amount of BRL million, to be exercised until 02/07/2018. This operation is subject to the conditions usual to this type of transaction and to approval by the Conselho Administrativo de Defesa Econômica - CADE. The values received will be directed towards the significant reduction of net debt, thus reducing financial costs and positioning the company at a strategic level of competitiveness These movements take place in the direction of increasing productivity, efficiency and of improving the use of our assets, and thus contribute to a higher return on operations. Consolidated Financial Highlights (IFRS) NET REVENUE Consolidated net revenue for the quarter has shown an increase of 7.2% in comparison to the same period of 2016, totaling BRL 1,102.6 million, due mostly to larger volume of sales, the successful implementation of price increases, and the incorporation of Ceusa s results. Of this, BRL million come from the foreign market through our exports and operations in Duratex Colombia. Foreign revenue, therefore, represents 17.3% of total revenue. BRL '000 - consolidated 4Q17 4Q16 % 3Q17 % % Net revenue 1,102,632 1,028, % 1,019, % 3,990,866 3,909, % Domestic market 911, , % 843, % 3,315,400 3,159, % Foreign Market 190, , % 175, % 675, , % Duratex Colombia 98,026 88, % 86, % 331, , % Exports from Brazil 92,718 98, % 88, % 344, , % 4

5 Net Revenues by area of operation (in % in 4Q17): WOOD DIVISION DECA DIVISION COST OF GOODS SOLD The Cash Cost, that is, the Cost of Goods Sold net of Depreciation, Amortization and Exhaustion, and of the net variation in the Fair Value of Biological Assets, closed the fourth quarter at BRL million. This result represents an increase of 9.8% in comparison to the same period of 2016; slightly above the increase in net revenue. A mild deterioration of the mix in both business divisions and the hike in the cost of commodities have contributed to this increase, which was partially offset by the cost-cutting projects. The Duratex Management System (SGD) is the Company s main tool for increasing the efficiency and profitability of operations, and closed the year with a cost cut of BRL 76 million. Excellency in management remains one of the fundamental pillars in Duratex s strategy, and aims to achieve short term objectives designed to recover the business returns and at preparing the Company for new cycles of growth. BRL 000 consolidated 4Q17 4Q16 % 3Q17 % % Cash COGS (695,393) (633,043) 9.8% (628,298) 10.7% (2,540,874) (2,513,754) 1.1% Variation in fair value of biological assets (1) 93,603 43, % 40, % 214, , % Depletion tranche of biological assets (31,284) (64,596) -51.6% (30,372) 3.0% (123,118) (142,297) -13.5% Depreciation, amortization and depletion (99,996) (108,874) -8.2% (104,069) -3.9% (398,038) (402,550) -1.1% Gross profit 369, , % 296, % 1,143,769 1,009, % Gross margin 33.5% 25.8% % % 25.8% - BRL 000 ex Duratex Colombia 4Q17 4Q16 % 3Q17 % % Cash COGS (639,579) (576,186) 11.0% (575,609) 11.1% (2,335,234) (2,270,441) 2.9% Variation in fair value of biological assets (1) 93,483 42, % 39, % 213, , % Depletion tranche of biological assets (31,284) (64,596) -51.6% (30,372) 3.0% (123,118) (142,297) -13.5% Depreciation. amortization and depletion (96,759) (104,655) -7.5% (100,174) -3.4% (383,274) (384,175) -0.2% Gross profit 335, , % 264, % 1,018, , % Gross margin 33.2% 24.5% % % 24.5% - 5

6 Net Revenues ex Duratex Colombia (in BRL million) Cash Cost (in BRL million) and Gross Margin (in %) - ex Duratex Colombia , Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Cash Cost Gross Margin Cost of Goods Sold Wood Division (in % in 4Q17) Cost of Goods Sold Deca Division (in % in 4Q17) Other materials Resin Paper Wood* Labor Electricity Depreciation & Amortization Fuel 40 9 Other materials Metals Labor Electricity Depreciation & Amortization Fuel * Includes exhaustion of the amount invested related to the cost of wood. 6

7 SELLING EXPENSES Selling expenses closed the quarter at BRL million, equivalent to 12.4% of the consolidated net revenue. In the year, these expenses totaled BRL million, representing 16.0% of net revenue. We have verified in 2017 the increase of certain variables that had a direct impact on Selling Expenses. Amongst them, there was the increase in Freight Costs, especially with regards to exports. There was also an increase in branding investments, through means of advertising and participation in fairs. These investments are in line with the strategy of commercial positioning of our solution portfolio, and of straightening the proximity with the final customer. Despite slightly higher expenses in 2017, we consider these investments to be instrumental to the development of our activities in products and solutions. Aiming at a larger efficiency within the scope of SGD, we constantly revise the Company s logistic model in order to guarantee competitive costs and differentiated services for our clients. This balance of high level of service with cost efficiency is one of the Company s top internal priorities. BRL 000 consolidated 4Q17 4Q16 % 3Q17 % % Selling expenses (172,905) (154,070) 12.2% (165,861) 4.2% (638,521) (591,429) 8.0% Percentage of net revenue 15.7% 15.0% 16.3% 16.0% 15.1% - Sales Expenses (in BRL million) and % in Relation to Net Revenues ex Duratex Colombia GENERAL & ADMINISTRATIVE EXPENSES General and Administrative expenses have totaled BRL 37.1 million in the fourth quarter. These expenses closed the year at BRL million, representing 3.6% of net revenue, in line with the results of Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Here, we would like to highlight our commitment to SGD, which holds turning our operations leaner and more efficient as a top priority. We have been able to maintain our General and Administrative Expenses stable in a year of transformation and investments, which proves the efficiency of our management system. Cash Cost Gross Margin BRL 000 consolidated 4Q17 4Q16 % 3Q17 % % General and administrative expenses (37,117) (34,318) 8.2% (36,257) 2.4% (143,308) (141,552) 1.2% Percentage of net revenue 3.4% 3.3% - 3.6% - 3.6% 3.6% - 7

8 EBITDA The table below shows a reconciliation of EBITDA, in line with the system set out in CVM Instruction No. 527/12. Based on this result, and as a way of better expressing the Company's operational cash generation, two adjustments have been made: the exclusion of events of a purely accounting and non-cash nature from EBITDA, and the disregarding of extraordinary events. Thus, in keeping with best practices, the following table shows the calculation of the indicator which best reflects the Company's cash generation. EBITDA reconciliation in BRL 000 consolidated 4Q17 4Q16 % 3Q17 % % Net income 84,618 25, % 83, % 185,015 26, % Income tax and social contribution (4,082) 1, % 37, % 30,213 (8,386) % Net financial result 54,285 78, % 29, % 206, , % EBIT 134, , % 150, % 421, , % Depreciation. amortization and depletion Depletion tranche of biological assets EBITDA according to CVM No. 527/12 113, , % 114, % 442, , % 31,284 64, % 30, % 123, , % 279, , % 295, % 986, , % EBITDA margin CVM No. 527/ % 28.1% % % 23.0% - Change in fair value of biological assets (93,603) (43,135) 117.0% (40,027) 133.8% (214,933) (157,973) 36.1% Employee benefit (312) (906) -65.6% (3,682) -91.5% (5,258) (3,117) 68.7% Extraordinary events (1) 42,906 (28,146) - (46,821) % (6,587) (59,133) -88.9% Recurring and adjusted EBITDA 228, , % 204, % 760, , % Recurring and adjusted EBITDA margin 20.8% 21.1% % % 17.4% - (1) Extraordinary events, including: 3Q16: (i) results from the sale of lands from the subsidiary Duratex Florestal (-) BRL 30,814 K; (ii) devolution of excess from the private pension plan (-) BRL 7,752 K; (iii) non-recurring employee restitution (+) BRL 7,579 K; 4Q16: (i) results from the sale of lands from the subsidiary Duratex (-) BRL 30,939 K; (ii) results from the sale of furniture line pertaining to da Duratex Colômbia (+) BRL 2,793 K; 1Q17: (i) results from the sale of lands from the subsidiary Duratex Florestal (-) BRL 2,672 K; 3Q17: (i) results from the sale of lands from the subsidiary Duratex Florestal (-) BRL 46,821 K; 4Q17: (i) results from the sale of lands from the subsidiary Duratex Florestal (-) BRL 7,890 K; provision for non-recovered assets BRL (+) 50,796. Despite the challenging scenario, 2017 marked the retake of operations, and consequentially, the improvement of returns. Although the increase in earnings was discreet, initiatives implemented in our management under the Duratex Management System, have positioned the Company for an advance in returns. The expansion of the EBITDA was largely a results of these initiatives. The adjusted and recurring EBITDA of 4Q17 was BRL million, above both periods of comparison.the EBITDA margin closed the quarter at 20,8% This index represented BRL million in the year, with a margin of 19.0% Although these initiatives did not impact our result, they are part of the Company s strategy of optimizing its asset base in order to improve cash generation and increase returns on all its operations. Origin of Adjusted Recurring EBITDA (in % in 4Q17) Extraordinary events were removed from the adjusted and recurring EBITDA. The subsidiary Duratex Florestal sold land which lead to an extraordinary result of BRL 7.9 million. The wood panel division executed a provision for non-recovered assets which are no longer central to the Company s strategy in the amount of BRL 50.8 million DECA DIVISION WOOD DIVISION 8

9 NET EARNINGS Consolidated net earnings for 4Q17 was BRL 84.6 million, which represents a ROE of 9.6%. This result was affected by extraordinary events, with the positive impact of BRL 5.2 million due to the result of sale of land and the negative impact of BRL 33.5 due to provisions for non-recovered assets which were no longer central to the Company s strategy. The earnings improvement in 2017 reflects mainly the cost savings resulting from the Duratex Management System (SGD), the price hikes implemented and a more favorable financial result due to the fall of interest rates and the liability management. BRL 000 consolidated 4Q17 4Q16 % 3Q17 % % Net earnings 84,618 25, % 83, % 185,015 26, % Extraordinary events 28,318 (18,744) % (30,902) % (4,347) (39,195) -88.9% Recurring net earning 112,936 6, % 52, % 180,668 (12,966) % ROE 7.2% 2.2% - 7.2% - 4.0% 0.6% - Recurrent ROE 9.6% 0.6% - 4.5% - 3.9% -0.3% - (1) Net effect of extraordinary events mentioned previously, including 3Q16: (i) result from the sale of lands from the subsidiary Duratex Florestal (-) BRL 20,337 K; (ii) devolution of excess from the private pension plan (-) BRL K; (iii) Non-recurring employee restitution (+) BRL 5, 002 K; 4Q16: (i) result from the sale of lands from the subsidiary Duratex Florestal (-) BRL 20,420 K; (ii) results from the sale of furniture line pertaining to da Duratex Colômbia (+) BRL 1,676 K; 1Q17: (i) result from the sale of lands from the subsidiary Duratex Florestal (-) BRL 1,763 K; 3Q17: (i) result from the sale of lands from the subsidiary Duratex Florestal (-) BRL 30,902 K; 4T17: (i) result from the sale of lands from the subsidiary Duratex Florestal (-) BRL 5,207 K; provision for non-recovered assets BRL (+) 33,525. ADDED VALUE The Added Value for the quarter totaled BRL 479.6m. Of this amount, BRL 133.6m, equivalent to 27.9% of the total Value Added, was destined for the federal, state and municipal governments in the form of taxes and contributions. Distribution of Value Added in 4Q17 16, Labor remuneration Government remuneration Debtholders remuneration Shareholder remuneration 9

10 INDEBTEDNESS The combination of a better operating cash generation, lower interest rates, liability management and a better management of our assets resulted in a deleveraging process over the course of The net debt at the end of the year was BRL 2,100.5 million, which represents a leverage ratio of 2.76%. Although we have done important investments in the year, such as Ceusa s acquisition, we noticed a reduction of this ratio. This reduction was a commitment since the beginning of the year. Reducing the financial leverage continues to be one of our main priorities for 2018 and the foundation of our longterm strategy. The sale of assets, informed in a subsequent event, will have a material impact in this process over the next quarters, since the amounts received are going to be used mostly to reduce net debt and improve our financial performance. BRL /12/17 31/12/16 Var BRL 30/09/17 Var BRL Short-Term debt 764, ,110 83, ,234 (62,410) Long-Term debt 2,410,000 2,775,931 (365,931) 2,209, ,009 Total debt 3,174,824 3,457,041 (282,217) 3,037, ,599 Cash and equivalent 1,074,364 1,416,360 (341,996) 918, ,156 Financial Investments ,480 (49,480) Net debt 2,100,460 2,040,681 59,779 2,069,537 30,923 Net debt/recurring and adjusted EBITDA Net debt/equity (in %) 44.5% 44.6% % - FINANCIAL REVENUES AND EXPENSES BRL 000 4Q17 4Q16 % 3Q17 % % Financial revenues 27,600 28, % 49, % 163, , % Financial expenses (81,885) (107,475) -23.8% (79,073) 3.6% (369,144) (447,236) -17.5% Net financial result (54,285) (78,801) -31.1% (29,910) 81.5% (206,113) (299,272) -31.1% Amortization Schedule (in BRL millions) DIVIDENDS Duratex s dividend policy requires a minimum dividend distribution of 30% of the adjusted net earnings. According to the proposal addressed by the Board, it was considered BRL 60.8 million as dividends, as interest on equity, equivalent to BRL per share & beyond 10

11 Gross Indebtedness as of the end of December, 2017 (in BRL million) Origin of Debt (%) 764, Short-term Long-term 81.0 Local currency Foreign currency (100% hedged to BRL) Operations Wood Division HIGHTLIGHTS 4Q17 4Q16 % 3Q17 % % SHIPMENTS (IN M 3 ) STANDARD 419, , % 360, % 1,388,355 1,381, % COATED 251, , % 254, % 1,010,779 1,051, % TOTAL 671, , % 614, % 2,399,134 2,433, % FINANCIAL HIGHLIGHTS (BRL '000) NET REVENUE 692, , % 651, % 2,515,732 2,594, % DOMESTIC MARKET 524, , % 489, % 1,902,306 1,902, % EXPORT MARKET 167, , % 161, % 613, , % Net unit revenue (BRL/m3 shipped) % % % Unit cash cost (BRL/m3 shipped) (629.31) (649.63) -3.1% (644.27) -2.3% (671.00) (680.64) -1.4% Gross profit 257, , % 185, % 698, , % Gross margin 37.2% 24.6% % % 24.9% - Sales expenses (101,798) (90,667) 12.3% (96,584) 5.4% (373,383) (360,558) 3.6% General and administrative expenses (18,320) (18,538) -1.2% (17,711) 3.4% (73,597) (77,571) -5.1% Operating profit before financial results 95,296 89, % 124, % 274, , % Depreciation. amortization and depletion 81,579 93, % 86, % 327, , % Depletion tranche of biological assets 31,284 64, % 30, % 123, , % EBITDA according to CVM No. 527/12(1) 208, , % 240, % 724, , % EBITDA margin according to CVM No. 527/ % 35.7% % % 28.0% - Variation in fair value of biological assets (93,603) (43,135) 117.0% (40,027) 133.8% (214,933) (157,973) 36.1% Employee benefits (63) (626) -89.9% (1,632) -96.1% (1,297) (2,675) -51.5% Extraordinary event (2) 42,906 (28,146) % (46,821) % (6,587) (62,269) -89.4% Recurring and adjusted EBITDA 157, , % 152, % 502, , % Recurring and adjusted EBITDA margin 22.7% 25.3% % % 19.4% - (1) EBITDA (Earnings Before Interest,Taxes, Depreciation and Amortization): Measure of operational performance according to Instruction CVM527/12. (2) Extraordinary events, including: 3Q16: (i) result from the sale of lands from the subsidiary Duratex Florestal (-) BRL 30,814 K ; (ii) devolution of excess from the private pension plan (-) BRL K; 4Q16: result from the sale of lands from the subsidiary Duratex Florestal (-) BRL 30,939 K; results from the sale of furniture line pertaining to da Duratex Colômbia: (+) BRL K; 1Q17: result from the sale of lands from the subsidiary Duratex Florestal (-) BRL 2,672 K; 3Q17: result from the sale of lands from the subsidiary Duratex Florestal (-) BRL 46,821 K ; 4Q17: result from the sale of lands from the subsidiary Duratex Florestal (-) BRL 7,890 K; provision for non-recovered assets BRL (+) 50,

12 2017 ended on a positive tone for the Wood Division, reflecting Duratex s new positioning in wood panels and a gradual improvement of demand. Several initiatives were successfully implemented throughout the year, including price increases, and commercial and product development actions aimed at stimulating demand and improving the mix, along with efforts in cost reduction, as previously stated. As registered by IBÁ, the positive scenario in demand propelled the volume of wood panels marketed, which, along with the normalization of market share, lead to an expedition of thousand m 3. This quarter registered the best expedition of the year, 5.2% above Regarding 2018, the focus will continue on the initiatives to save costs and gain efficiency, under the umbrella of SGD. We have the opportunity to leverage our supply chain and the competitive advantage of our 5 wood panels mills, reallocating the mix of production among them. We are developing tools to stimulate the demand for wood panels, increase the customer loyalty, improve the service level and sustain the prices at a level that benefits the returns of our operations. Wood Sales Breakdown (in % in 4Q17) We have noticed a slight deterioration of the mix in this quarter, due to the fact that most of the growth in volume was concentrated in the standard lines that have a smaller added value. This deterioration was offset by a more efficient cost dilution, a consequence of operational leveraging. The result was a fourth quarter EBITDA of BRL million, and a margin of 22.8%, in line with the results registered in the previous quarter Efforts related to cost reduction and gains in efficiency within the scope of the SGD will continue to be our focus in We have the opportunity to rearrange the mix of our production by exploring our logistic system and the competitive advantage of each of our five wood panel production units. We are taking measures to stimulate the demand for wood panels and the fidelity of clients, by offering high quality services while maintaining prices at levels that benefit the return of our operations. Furniture Industry Resales Civil Construction/Others 12

13 DECA Division HIGHLIGHTS 4Q17 4Q16 % 3Q17 % % SHIPMENTS (IN 000 ITEMS) BASIC PRODUCTS 1,902 1, % 2, % 7,666 7, % FINISHING PRODUCTS 4,322 4, % 4, % 18,387 17, % TOTAL 6,224 5, % 6, % 26,053 24, % SHIPMENTS (in m 2 ) FINISHING PRODUCTS 531, ,463 FINANCIAL HIGHLIGHTS (BRL1.000) NET REVENUE 410, , % 368, % 1,475,134 1,315, % DOMESTIC MARKET 387, , % 354, % 1,413,094 1,257, % EXPORT MARKET 23,133 16, % 13, % 62,040 58, % Net unit revenue (BRL per item shipped) % % % Net unit revenue (BRL per m 2 shipped) Unit cash cost (BRL per item shipped) Unit cash cost (BRL per m 2 shipped) (39.95) (36.71) 8.8% (34.29) 16.5% (34.81) (34.88) -0.2% (45.24) (45.24) - - Gross profit 112,429 94, % 111, % 445, , % Gross margin 27.4% 28.2% % % 27.6% - Sales expenses (71,107) (63,403) 12.2% (69,277) 2.6% (265,138) (230,871) 14.8% General and administrative expenses (18,797) (15,780) 19.1% (18,546) 1.4% (69,711) (63,981) 9.0% Operating profit before financial results 39,525 16, % 26, % 146,678 69, % Depreciation and amortization 32,195 25, % 28, % 115, , % EBITDA according to CVM No. 527/12 (1) 71,720 42, % 54, % 261, , % EBITDA margin according to CVM No. 527/ % 12.5% % % 13.2% - Employees benefits (249) (280) -11.1% (2,050) -87.9% (3,961) (442) 796.2% Extraordinary event (2) ,136 - Recurring and adjusted EBITDA 71,471 41, % 52, % 257, , % Recurring and adjusted EBITDA margin 17.4% 12.4% % % 13.4% - (1) EBITDA (Earnings Before Interest,Taxes, Depreciation and Amortization): Measure of operational performance according to Instruction CVM527/12. (2) Extraordinary Events: 3Q16: (i) devolution of excess from the private pension plan (-) BRL 4,443 K; (ii)non-recurring employee restitutions (+) BRL 7,579 K. 13

14 The civil construction materials industry registered a quarter of mild contraction, and we now begin to glimpse at a discreet growth of the sector in Despite this challenging scenario, Deca presented a growth of 2.4% in volumes in comparison to Net revenue was positively affected in the quarter by the incorporation of the results of the recently-acquired Ceusa, which recorded an expedition of thousand m 2 in the quarter. When excluding this effect, Deca s net revenue presented an increase of 8.8% in comparison to the same period of We have noticed a positive expansion in Deca s sales this year, reflecting the strength and recognition of the brand, that are instrumental in the development of our activities in this difficult moment. Deca registered an increase of 8.8% in net revenue in comparison to the same period last year, when excluding the positive effects of Ceusa s incorporation into the results. We have also noticed a mild deterioration of mix, which is natural due to the seasonality of Deca s products that show a lighter participation of finished products. This effect is mainly due to the smaller expedition of electric shower heads due to the higher temperatures this time of the year. The gross margin, however, increased from 28.2% to 30.7%, mainly a consequence of the incorporation of Ceusa into the results. Additionally, there were planned stops within Deca s production units. These stops resulted in a negative impact of approximately BRL 10 million in the costs of the division. With regards to Ceusa, there was the recognition of BRL 25.4 million as revenue resulting from the adhesion to the REFIS PERT program. This amount was accounted as other operational results, and had a positive impact on Deca this quarter. As a result, Deca s Adjusted and Recurring EBITDA was BRL 71.5 million and BRL million in the year, respectively, with a margin of 18%. The annual result presented an evolution of 46% in comparison to This improvement is a reflection of all the adjustments made in this division, even in a period of crisis. Considering the slow and gradual recovery of the sector, we continue to focus on the differentiated positioning of the division, brought forth by the brands Deca, Hydra, and the recently-acquired Ceusa, along with the emphasis on relationships with clients, consumers and specifiers, allied with consistent cost-management, as the main proponents of results in Deca Sales Breakdown (in % in 4Q17) The investments in advertising and promotions were intensified during the last months of the year, due mainly to efforts in the positioning of the brand and more aggressive competition. In addition to this effect, there was an increase in freight costs and larger administrative expenses resulting from adjustments made throughout the second semester Resales/Home Center Construction companies Wholesale Others 14

15 Capital Markets Duratex closed 2017 with a Market Cap of BRL 6,341.6 million, based on a closing share price of BRL Shareholding Structure as of December 2017 (in %) There were thousand trades in DTEX3 at the B3 spot market within the fourth quarter. This represents a trading volume equivalent to BRL 1,639.9 million, or a daily trading volume of BRL 27.8 million Our shares are listed on the Novo Mercado sections of B3 which brings together companies with the highest standards of corporate governance. We also have a differentiated dividend policy, with the distribution of 30% of adjusted net earnings to shareholders, while also adhering to the Abrasca Code for Self-Regulation and Good Practices for Listed Companies Itaúsa and Families Ligna and Family Pension Funds Foreign Investors Other Domestic Investors Treasury Social and Enviromental Responsability There was an increase in our headcount once Ceusa was incorporated into Duratex. We closed 2017 with 11,400 employees. It is worth mentioning that, despite the increase in headcount, the amount dedicated to employee remuneration varied with less intensity in 2017, thus reflecting our efforts in adjusting processes and capturing cost cuts in the Duratex Management system (SGD). (BRL'000) 4Q17 4Q16 % 3Q17 % % Employees (quantity) 11,400 11, % 11, % 11,400 11, % Remuneration 107, , % 104, % 421, , % Obligatory legal charges 55,411 50, % 52, % 216, , % Differentiated benefits 27,026 26, % 27, % 106, , % Since 2016, a commitment was made towards greater transparency with our environmental efforts. The results relating to water, waste, total energy, electricity and residues from 2017 are presented below. Tracking of environmental indicators has been carried out since 2004 and is part of the SGA (Environmental Management System sustentabilidade/meio-ambiente/sistema-de 40,020,027,61030,41,7DuratexFactSheet3Q1613gestaoambiental) of the Company, which holds ISO certification ( This practice is fundamental to ensuring the evaluation and continuous improvement of all our processes and products. 15

16 Water consumption* Wastewater disposal* m 3 water ,1% Wood panels ,8% m 3 wastewater ,5% 7,0% ,6% 3,6% Forest Metals Sanitay ware Wood panels ,4% Forest Metals -31,8% Sanitay ware Total energy* Electric energy* energy GJ ,8% -20% -6,6% Wood panels Forest Metals Industrial Solid Waste in Landfill Areas* 4,2% Sanitay ware energy GJv ,6% -16,9% -3,9% -2,8% Wood panels Forest Metals 2017 Direct emissions of greenhouse gases* Sanitay ware industrial solid waste ton ,8% Wood panels 25 0 Forest ,7% -15,7% Metals Sanitay ware t CO 2 e % Duratex AFR Accident Frequency Rate Accumulated in the period 7,0 6,0 5,0 4,0 3,0 2,0 3,24 4,76 2,82 5,27 2,66 5,24 4,15 3,13 2,16 4,53 3,11 1,0 0 Deca Hydra Wood panels ,0 Forest Headquartes Duratex 2017 *The environmental performance for Hydra and our Central Office were not presented in the graphs above, for they represent a small part of the Company (0.5% of the water consumption, 1% of effluent discharges, 0.1% of the total energy consumption, 0.3% of electric energy consumption, 3.6% of the total residue discharge). 16

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

18 Financial Statements Consolidated assets (BRL '000) 12/31/17 VA% 09/30/17 VA% 12/31/16 VA% CURRENT 3,023, % 2,921, % 3,214, % Cash and equivalents 1,074, % 918, % 1,416, % Financial Investments - 0.0% 49, % Clients accounts receivable 932, % 854, % 814, % Accounts receivable from related parties 35, % 35, % 21, % Inventory 760, % 836, % 802, % Ammounts receivable 63, % 75, % 47, % Recoverable taxes and contributions 138, % 128, % 95, % Other assets 13, % 17, % 11, % Non current assets available for sale 5, % 5, % 5, % NON-CURRENT 6,442, % 6,111, % 6,126, % Linked deposits 51, % 51, % 49, % Amounts receivable 106, % 83, % 68, % Pension plans credit 105, % 105, % 100, % Recoverable taxes and contributions 13, % 14, % 17, % Deffered income tax and contributions 313, % 252, % 255, % Investments in subsidiaries and addiliates 6, % - 0.0% - 0.0% Other investments 1, % % % Fixed assets 3,490, % 3,469, % 3,571, % Biological assets 1,698, % 1,620, % 1,528, % Intangible assets 655, % 512, % 533, % TOTAL ASSETS 9,465, % 9,032, % 9,340, % 18

19 CONSOLIDATED LIABILITIES 12/31/2017 VA% 09/30/2017 VA% 12/31/2016 VA% CURRENT 1,551, % 1,407, % 1,197, % Loans and Financing 764, % 827, % 681, % Suppliers 296, % 251, % 214, % Staff Obligations 119, % 134, % 89, % Accounts Payable 163, % 134, % 134, % Accounts receivable from related parties 2, % 2, % 2, % Taxes and contribution 143, % 56, % 68, % Dividends and equity-on-interest payable 61, % % 6, % NON-CURRENT 3,196, % 2,947, % 3,572, % Loans and financing 2,410, % 2,209, % 2,775, % Contigency Provisions 113, % 85, % 109, % Deffered income tax and social contribution 483, % 470, % 488, % Other accounts payable 189, % 181, % 185, % Taxes and contribution - 0.0% - 0.0% 13, % SHAREHOLDERS'S EQUITY 4,716, % 4,678, % 4,570, % Equity 1,970, % 1,970, % 1,970, % Cost of share issued (7,823) -0.1% (7,823) -0.1% (7,823) -0.1% Capital reserves 345, % 344, % 342, % Transactions between partner and partnership (18,731) -0.2% (18,731) -0.2% (18,731) -0.2% Re-evaluation reserves 57, % 57, % 60, % Profit reserves 1,980, % 1,956, % 1,852, % Adjustments in equity valuation 416, % 402, % 398, % Shares held in treasury (27,851) -0.3% (27,851) -0.3% (27,931) -0.3% Participation of non-controlling shareholders TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY % % 1, % 9,464, % 9,032, % 9,340, % 19

20 CONSOLIDATED IN IFRS Consolidates profit and loss statement (BRL '000) 4Q17 4Q16 VAR % 3Q17 VAR % VAR % 4Q17 X 4Q17 4Q17 X 3Q X 2016 NET SALES REVENUE 1,102,632 1,028, % 1,019, % 3,990,866 3,909, % Domestic Market 911, , % 843, % 3,315,400 3,159, % Foreign Market 190, , % 175, % 675, , % Biological asset 93,603 43, % 40, % 214, , % Cost of goods sold (695,393) (633,043) 9.85% (628,298) 10.68% (2,540,874) (2,513,754) 1.1% Depreciation/amortization/ depletion (99,996) (108,874) -8.15% (104,069) -3.91% (398,038) (402,550) -1.1% Depletion of biological assets (31,284) (64,596) % (30,372) 3.00% (123,118) (142,297) -13.5% GROSS PROFIT 369, , % 296, % 1,143,769 1,009, % Selling expenses (172,905) (154,070) 12.22% (165,861) 4.25% (638,521) (591,429) 8.0% General and administrative expenses (37,117) (34,318) 8.16% (36,257) 2.37% (143,308) (141,552) 1.2% Management compensation (4,048) (3,715) 8.96% (3,881) 4.30% (15,612) (14,331) 8.9% Other operating results. net (20,671) 32, % 59, % 75,013 55, % OPERATING PROFIT BEFORE FINANCIAL RESULTS 134, , % 150, % 421, , % Financial revenues 27,600 28, % 49, % 163, , % Financial expenses (81,885) (107,475) % (79,073) 3.56% (369,144) (447,236) -17.5% PROFIT BEFORE INCOME TAX AND SOCIAL CONTRIBUTION Income tax and contribution - current Income tax and contribution - deffered 80,536 27, % 120, % 215,228 17, % (7,940) (18,321) % (25,617) % (58,244) (80,121) -27.3% 12,022 16, % (11,948) % 28,031 88, % NET INCOME FOR THE PERIOD 84,618 25, % 83, % 185,015 26, % 20

21 CASH FLOW 4Q17 4Q16 VAR % 3Q17 VAR % Q17 X 4Q17 4Q17 X 3Q17 Profit before income tax and social contribution 80,536 27,117 53, ,709 (40,173) 215,228 17,843 Items with no cash effect: Depreciation/amortization/depletion 145, ,380 (38,320) 144, , ,102 Variation in fair value of biological assets (93,603) (43,135) (50,468) (40,027) (53,576) (214,933) (157,973) Interest. exchange rate and monetary variations. net 68, ,102 (33,074) 72,367 (4,339) 332, ,517 Provisions. asset write-offs 79,652 26,628 53,024 (3,508) 83, ,056 82,524 Investment in working capital (50,062) (31,160) (18,902) (90,910) 40,848 (305,126) (151,400) Increase (reduction) in assets Clients receivable accounts (43,720) (42,175) (1,545) (68,793) 25,073 (168,617) (66,015) Inventories 94,983 40,775 54,208 45,805 49,178 62,201 (10,404) Other assets (27,934) (21,515) (6,419) (26,475) (1,459) (107,663) (5,962) Increase (reduction) in liabilities Suppliers 13,004 28,949 (15,945) (36,948) 49,952 51,164 12,673 Staff obligations (22,779) (44,783) 22,004 18,744 (41,523) 22,873 (19,155) Accounts payable (136,199) 16,914 (153,113) 1,640 (137,839) (140,982) 18,917 Taxes and contribution 86,859 (5,517) 92,376 (5,412) 92,271 26,805 (53,503) Other liabilities (14,276) (3,808) (10,468) (19,471) 5,195 (50,907) (27,951) Cash from operations 229, ,932 (34,321) 203,414 26, , ,613 Income tax and contribution paid (28,558) (3,324) (25,234) (4,710) (23,848) (44,906) (14,771) Interest paid (69,905) (64,515) (5,390) (62,811) (7,094) (259,610) (321,244) Cash generated from operational activies 131, ,093 (64,945) 135,893 (4,745) 404, ,598 Investment activities Debentures 49,171-49,171 (49,171) 98,342 - Investimentos em ativo imobilizado (39,470) (41,723) 2,253 (43,942) 4,472 (178,162) (177,095) Investiments in intangible assets (4,175) (4,062) (113) (1,032) (3,143) (8,975) (12,957) Investiments in biological assets (38,977) (50,685) 11,708 (41,529) 2,552 (178,775) (190,783) Acquisition of subsidiary (50,270) - (50,270) - (50,270) (50,270) (92,907) Cash used in investment activities (83,721) (96,470) 12,749 (135,674) 51,953 (416,182) (473,742) Funding activities Financing 475, ,545 (433,830) 4, , ,058 2,015,008 Debentures (152,611) Amortization of financing (368,397) (844,178) 475,781 (121,426) (246,971) (821,997) (1,241,178) Interest on capital/dividends - (8) (6,084) (105,516) Shares on treasury (80) 80 - Capital increase by private subscription of shares ,640 Cash (used) in funding activities 107,318 65,359 41,959 (117,086) 224,404 (331,943) 536,343 Exchange rate variation on cash and equivalents 1,411 (1,616) 3,027 (450) 1,861 1,431 (7,560) Increase (reduction) in cash in the period 156, ,366 (7,210) (117,317) 273,473 (341,996) 505,639 Initial balance 918,208 1,252,994 (334,786) 1,035,525 (117,317) 1,416, ,721 Closing balance 1,074,364 1,416,360 (341,996) 918, ,156 1,074,364 1,416,360 21