Santander 14th Annual Latin America Conference. January 2010

Transcription

1 Santander 14th Annual Latin America Conference January

2 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. 2

3 Agenda The Company Market Positioning Pulp and Paper Market 3Q09 Financials Recent Events 3

4 The Company 4

5 VCP and Aracruz Merged to Create Fibria Shareholder Structure Votorantim Industrial S.A. BNDESPar Free Float 29.3% 33.6% (1) 37.1% 50.0% 50.0% Veracel Celulose S.A. Conpacel Present value of R$4.5 billion of announced post-merger synergies Up to 2012, 90% of actions to extract synergies are expected to be in place Logistics Tax 6% 2% 11% Others 27% Industrial Commercial 15% 16% SG&A 23% Forestry (1) Position as of Nov 30, BNDESParhas 21% linked to a shareholder s agreement with VID during the first 3 years, and 10.9% during the following 2 years. 5

6 Improved Corporate Governance Board of Directors Board Advisory Committees José Luciano Penido Raul Calfat Chairman of the Board Votorantim Representative Auditing Wang Wei Chang João Miranda Votorantim Representative Votorantim Representative Personnel and Remuneration Alexandre D Ambrosio Armando Mariante Carvalho Junior Votorantim Representative BNDES Representative Finance Eduardo Rath Fingerl BNDES Representative José Armando de Figueiredo Campos Independent Member Sustainability Alexandre Gonçalves Silva Independent Member Executive Board Board of Directors CEO Carlos A. Aguiar Ind. Ops & Engineering Comm. & Int l Logistics Paper, Planning, Procurement, and Forestry Ops. & Tech Controllership & Risk Management Treasury & IR Human and Org. Development Francisco Valério João Felipe Carsalade Marcelo Castelli Evando Coura Marcos Grodetzky Miguel Caldas Each officer with more than 20 years experience in the sector 6

7 Market Positioning 7

8 Creation of a Winning Player Superior Asset Combination Competitive Strengths Três Lagoas Conpacel Pulp Mill Paper Mill Port Terminal Belmonte Veracel Caravelas Portocel Aracruz Piracicaba Jacarei Santos Pulp production capacity: 5.4 MT / year (1) Paper production capacity: 358kT/ year (1) Total area: 1.1 million ha (1) Eucalyptusplantation: 604 thousand ha (1) 4 plants and operation of 3 port terminals, including the only specialized wood pulp terminal in Brazil, owned by us High yield in eucalyptus production (avg 45m 3 /ha/year) and certified forests Short harvest cycle: 6 years vs years in Southern U.S., Canada and Scandinavia Leadership in Market Pulp Scale and Integrated Operations Unique Forestry Management: Advanced Forestry Techniques and Short Harvest Cycle Forest to Port Integration Trough Efficient Logistics Low Production Cost DNA Strong / Reliable Customer Base Modern Industrial Plants Data as of Nov30, (1) Note: Excluding Guaíba. 8

9 Undisputable Leadership in the Global Market Pulp Dominant Position in a Growing Market Pulp Production Capacity Market Share (1) 2009E in ktons 1 st Fibria 5,400 Arauco ~ Twice APRIL CMPC Sodra Botnia Tembec Suzano Weyerhaeus er APP Canfor Domtar IP Ilim Georgia Pacific ENCE Mercer West Fraser Cenibra Stora Enso the size BSKP BHKP UKP Mech Source: PÖYRY, 2007 / As for Market Pulp: Pulp and Paper Products Council (PPPC) 2009 and Aracruz. Note: Capacity above mentioned does not include the Guaíba unit. (1) Market Share estimated considering 2009 nominal capacity. Pulp Demand (in ktons) 5 3% 22% 33 Total Pulp: 188 million MT Total Hardwood Pulp: 25 million MT CAGR e :8% CAGR e :3% % 32% Total Market Pulp: 48.5 million MT Total Eucalyptus Pulp: 17 million MT Growth e :6% Growth e :(1%) e BEKP Total Market Pulp 9

10 Low Production Cost DNA Unique Expertise Enabling the Lowest Cash Cost in the Market and High Profitability Fibria smargin vs. Macroeconomic Fundamentals (1) Cash Costs (2) 50% 48% 47% 45% EBITDA Margin (%) Avg. BEKP Pulp Prices (US$/ton) ,08 2,92 2,93 43% % % % % 524 Cash Cost (US$/t) Iberia Hardwood Cash Cost (US$/t) vs. Capacity (kt) US$/ton Wood Others (3) 2,35 Avg. FX Rate (R$/US$) 2,44 2,18 1,95 1,84 2, Iberia M09 (1) Source: Companies earnings releases, RISIand Brazilian Central Bank (2) Source: Hawkins Wright Estimate for 4Q09 (3) Fibria's 3Q09 figures Capacity (kt) 10

11 State-of-the-Art Production Facilities Advanced Technology and Production Process Lead to Lower Usage of Raw Materials, Reducing Costs Modern Plants Competitive Advantages Average Plant Capacity ( 000 tons) 2,500 2,000 1,500 Indonesia Indonesia Aracruz Capacity 2.3 mt Technical age: 9 Três Lagoas Capacity 1.3 mt Technical age: 0 Jacareí Capacity 1.1 mt Technical age: 5 LARGEST SINGLE LINE PULP PRODUCTION FACILITY IN THE WORLD Streamlined and efficient operations due to modern plants Environmental-friendly production process 1, Russia USA Japan Portugal Canada Sweden Brazil Chile Finland France Spain South Africa China Uruguay Veracel Capacity 1.1 mt Technical age: 3 BEST YIELD PER HECTAREOF THE WORLD Reduced emissions and disposition of residues Technical age of the equipment(years) Efficient use of chemicals and Allowing for a Unique Track Record of Quality Products 1 Last 12months ending June 30,

12 Unique Brownfield Potential Growth Fibria has the Best Sites Ready to Almost Duplicate Capacity Historical and Planned Capacity Increase In million of tones 1978: Start-up of mill "A" at Aracruz(Barrado Riacho) unit 1988: Acquisition of Celpav 1992: Acquisition of Papel Simão(Jacareí unit) 1996: New pulp line at Jacareímill 1991: Start-up of mill "B" at Barrado Riachounit 2003: Expansion of Jacareí mill 2003: Acquisition of Riocell(Guaiba Unit) 2005: Start-up of Veracel 2002: Start-up of mill "C" at Barrado Riachounit 2007: Asset swap Luis Antônio for Três Lagoas 2008: Establishment of Conpacel consortium 2009: Start-up of Três Lagoas mill Best sites for additional capacity Barra do RiachoIV Losango I 1,5 TrêsLagoasII 1,5 1,5 5,2 Veracel II 0,7 Brownfield Brownfield Greenfield Brownfield Expansion Aracruz VCP Fibria 12

13 Long Term Relationship With Key Clients Premium Paper Producers Value High Quality Pulp Customized Products Global Footprint Supplies customized pulp products to specific paper grades Sole supplier to key customers focused on eucalyptus pulp to the tissue market Top 10 main customers represent on average 65% of sales North America 25% Miami Sales Destination (1) Europe 31% Switzerland Hungary Asia 34% Uses of Fibria s Pulp Specialty 23% 52% 25% P&W Beijing Hong Kong Tissue Brazil 9% Offices Which Implies in Less Volatility in Sales NY004GAK_1.wor Volume Throughout Economic Cycles 1 Breakdown of sales destination in the last 12 months ending September 30,

14 Efficient and Reliable Logistics Network Efficient Supply Chain to the Customers Competitive Transportation (Forest > Mill > Ports) Efficient and Competitive Logistics (1) Aracruz (Barra do Riacho) Road Base 100 = March Jacareí Rail 300 Conpacel 200 Veracel 90% Barge Road 10% Road Três Lagoas Rail Mar-06 Jun-06 Sep-06 Dec-06 Mar-07 Jun-07 Sep-07 Dec-07 Mar-08 Jun-08 Sep-08 Dec-08 Mar-09 Jun-09 Average of 145 km from forests to pulp mills Baltic Dry Index Fibria's inland/ocean freight, insurance and other Portocelport terminal in the State of EspíritoSanto, is located only 1.5 km from Barrado Riachoplant Long term relationship with leading paper manufacturers allows for lower freight cost 1 Bloomberg. 14

15 Pulp and Paper Market 15

16 Positive Commodity Cycle and Demand Recovery World market pulp shipments to capacity World P&W paper shipments to capacity 89% 87% 97% 98% 97% 95% 94% 95% 93% 92% 93% 93% 91% 92% 95%92% 93% 92% 92% 92% 91% 90% 90% 89% 88% 89% 88% 86% 86% 87% 85% 85% 82% 83% 79% 79%79% 79%79% 77% 78% 78% 76% 77% 73% World pulp producers average days of supply European pulp consumers days of supply Jan-04 Jun-04 Nov-04 Apr-05 Sep-05 Feb-06 Jul-06 Dec-06 May-07 Oct-07 Mar-08 Aug-08 Jan-09 Jun-09 Nov-09 out/09 jan/08 mar/08 mai/08 jul/08 set/08 nov/08 jan/09 mar/09 mai/09 jul/09 set/09 nov/09 jan/08 abr/08 jul/08 out/08 jan/09 abr/09 jul/09 Source: PPPC Source: PPPC nov-09 jan-04 jun-04 nov-04 abr-05 set-05 fev-06 jul-06 dez-06 mai-07 out-07 mar-08 ago-08 jan-09 jun Source: PPPC Source: Utipulp

17 Pulp Supply / Demand Expected to Rebalance in the Medium Term Market Pulp: world demand growth China: Eucalyptus pulp shipments ( 000 t) -13% 2% -1% -21% -23% -12% Total North America Western Europe 73% 62% 9% -10% -23% -18% Latin America Japan China Average 163 k tons Jan/08 Mar/09 May/08 Jul/08 Sep/ Nov/ Jan/ Mar/09 Average 310 k tons May/09 Jul/09 Sep/09 Nov/09 Jan 2008 vs. Jan M08 vs. 11M09 BHKP List pulp price (FOEX) vs BRL/US$ Global market recovery % Demand Paper demand recovery; China keeping up the pace. Low consumers and producers inventories Market downtimes; Currency Appreciation of local currencies against the US$ Jan/09 Feb/09 Mar/09 Apr/09 May/09 BRL/USD Jun/09 Jul/09 Aug/09 Sep/09 Oct/09 FOEX BHKP List Price Nov/09 Dec/09-24% Successive announcements of list price increases (as of Jan.10) North America: US$760/t Europe: US$730/t Asia: US$690/t 17

18 China's presence in the market pulp sector China's Hardwood imports of BHKP by country China's share of market pulp (%) % Pulp shipments ('000 t) and market share (%) Growth in Total Market Pulp BHKP BEKP % % 'ooo t % +9% +39% 'ooo t % 7% 9% 10% 9% 11% 12% 10% 13% 12% 16% 23% 26% 0 +10% +165% +41% +80% +134% +34% 0 BHKP Total Brazil Indonesia Chile Russia Uruguay Canada USA Others Thailand M09 Brazil is the leading exporter of BHKP to China, accounting to approximately 40% of China's total imports in the 11M09. Between 2005 and 11M09, Chinese market share of eucalyptus shipments increased by 17 p.p. (total market pulp: +11 p.p.) Source: Hawkins Wright Source: PPPC W20. Coverage for chemical market pulp is 80% of world capacity. 18

19 P&W Paper Capacity Changes P&W paper capacity withdrawls (1) China: P&W paper capacity changes (1) Company Region/Date 000's tonnes Company / Mill Effective Date 000's tonnes M Real Europe/ Puyang Longfeng Jan International Paper Europe/ Tralin, Gaotang Feb Others Domtar Europe/2009 North America/ = 1.9 million t MCC Yinhe Paper Guangxi Jindaxing Paper Jul 2009 Q = 1.3 million t International Paper North America/ Yeuyang Paper Oct Others North America/ Fujian Nanping Paper Oct Stora Enzo Europe/ Yeuyang Paper Sappi Europe/ APP, Hainan Island Q ,200 Others Europe/ = 1.4 million t Sun Paper/IP Q = 2.3 million t Domtar North America/ Lee&Man 1H International Paper North America/ Jiangsu Oji Paper May Total P&W capacity withdrawls in Europe and North America 3,300 China Metalurgical Meili Paper Shandong Huatai Paper Shandong Chenming Q Q Q , = 2.4 million t Guangxi Huajin Group late Total P&W capacity changes in China 6,040 (1) Source: TerraChoice Dec

20 3Q09 Financials 20

21 Paper Business Paper: Sales volume ('000 t) Paper market recovery Market Imports more attractive with the US$ devaluation Demand starting to grow again, but apparent consumption is still below 2008 levels 3Q08 2Q09 3Q09 Fibria Performance Sales volume and revenue mix: focus on specialty papers Seasonality: positive impact on sales volume Paper: Sales and Revenue mix Sales Volume Revenues 28% 30% 30% 24% 20% 21% Specialty/Other Coated Uncoated 41% 43% 43% 21% 19% 19% 49% 50% 49% 38% 38% 38% 3Q08 2Q09 3Q09 3Q08 2Q09 3Q09 21

22 Financial Performance Pulp: sales volume ('000 t) Pulp: sales mix ( 000 t) Q09 3Q % 21% 37% 38% 11% 36% 10% 16% 3Q08 2Q09 3Q09 North America Asia Brazil Europe Net revenue (R$ million) Pulp Cash Cost (R$/t) Cash cost w/o stoppages (R$/t) Q08 2Q09 3Q09 3Q08 4Q08 1Q09 2Q09 3Q09 3Q08 2Q09 3Q09 22

23 Financial Performance EBITDA (R$ million) and EBITDA margin (%) CAPEX 9M09: R$1,232 million % 3Q % 2Q % 3Q % 7% 17% % 5% % 25% 14% 13% 31% 59% 41% 1Q09 2Q09 3Q09 Expansion Forestry Maintenance Other Net Income (R$ million) Adjusted Ebitda Nonrecurring effects / noncash Ebitda Income tax expense Exchange Variation on Debt Derivatives Other Exchange Variation Interest on loan Income on financial instruments Other financial income Minority Interest Other (*) Net income 3Q09 (*) The amount is the sum of the Depreciation, Amortization and Exhaustion. 23

24 Indebtedness Before the plan x After the plan Maturity Schedule 1 (R$ billion) 4,8 4,2 Original After plan Cash 2,8 2,1 1,4 1,5 0,7 1,6 1,4 1,5 1,1 1,8 2,0 0,9 0,8 1,0 0,1 0,1 0,9 0,4 0, Effects of the Liability Management Plan 3T09 Cash position R$ 2.6 bi R$ 4.8 bi Average Maturity 37 months 47 months Average Cost % p.a. 7.50% p.a. US$/ BRL 62%/38% 62%/38% Subordination structure 20% Receivables No Collateral With Collateral 43% 56% 1% 1 FX of September 30, 2009 R$ / US$ Does not include Seller s Financing 1% 79% 24

25 Recent Events 25

26 Recent Events Event Acquisition by VCP of additional 28% of Aracruz common shares VCP Capital Increase VCP conversion of prefered into common shares Tender Offer for Aracruz common shareholders Incorporation proposal for the ratio Merger of Aracruz shares into VCP approval Shareholderes Agreement - VID and BNDES End of withdrawal rights period End of Aracruz trading Fibria trading start (Bovespa: FIBR3 / NYSE: FBR) Approval of the merger of Aracruz into Fibria Date/estimate Jan 20 Apr 14 Jun12 Jul 02 Aug 24 Aug 24 Oct 29 Nov 12 Nov 17 Nov 18 Dec 22 Source: Fibria 26

27 Investor Relations Team: Marcos Grodetzky IRO André Gonçalves IR Manager Fernanda Naveiro Vaz IR Consultant Anna Laura Linkewitsch IR Specialist Livia Baptista IR Analyst 27