Pulp & Paper Day Santander SP. May 24, 2017

Transcription

1 Pulp & Paper Day Santander SP May 24, 2017

2 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.

3 Company Overview Pulp and Paper Market Financial and Operational Highlights 2017 Outlook CAPEX and Cash Cost Expansion Project Horizonte 2 Back up

4 Company Overview 4

5 (1) Controlling group (2) Free Float 41.44% + Treasury 0.06% 5 Shareholder Structure and Corporate Governance Votorantim S.A. (1) 29.42% BNDES Participações (1) 29.08% Free Float (2) 41.50% 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 30% independent members 100% independent members 50% independent members 45% independent members - Listed on Novo Mercado, highest level at BM&FBovespa: 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 1Q17 LTM Pulp capacity (1) million tons Net revenues US$ billion Total Forest Base (2) thousand hectares 1,056 Belmonte Veracel Caravelas Portocel Aracruz Planted area (2) thousand hectares 633 Net Debt US$ billion Net Debt/EBITDA (in Dollars) (3) X 3.79 Três Lagoas Unit and Horizonte 2 Project Jacareí Santos Port Terminal Pulp Unit Source: Fibria (1) Volume does not include Horizonte 2 project 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. 6

7 * Veracel is a joint venture between Fibria (50%) and Stora Enso (50%) and the total capacity is 1,120 thousand ton/year 7 Fibria s Units Industrial Capacity Horizonte 2 Mato Grosso do Sul 1,950 thousand t/year

8 8 Fibria s Commercial Strategy Sales Mix by Region and by End Use - Fibria Highlights Region 1Q17 North America 14% Europe Asia 34% 42% 10% LatAm End Use 1Q17 Tissue 42% Printing & Writing 36% Specialties 22% 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% 10% 24% 25% 24% 32% 42% 28% 24% 24% 22% 14% 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% 34% Q17 Europe North America Asia LatAm

9 Leadership Position Industry Outlook (1) Fiber Consumption 414 million t Recycled Fiber 244 million t 59% 41% Pulp 170 million t 16% 84% Mechanical 28 million t Chemical 142 million t 58% Integrated Mills 83 million t 42% Market Pulp 59 million t 48% 52% Softwood/Other 28 million t Hardwood 31 million t 25% 75% Acacia/Other 8 million t Eucalyptus 23 million t 77% Other Eucalyptus Pulp producers: 18 million t 23% (1) Fiber Consumption, Recycled Fiber and Pulp: RISI Market Pulp, Hardwood and Eucalyptus: PPPC Global 100 Report December

10 10 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 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 customer s base

11 Pulp and Paper Market 11

12 2016 Global growth has ONLY been relying on China BHKP DEMAND (KT AND % CHANGE, Y-O-Y) % 19.0% 5.5% -0.2% Global NA WE China % 5.2% 5.2% 2.0% Global NA WE China % 3.7% 6.2% -3.5% Global NA WE China % 20.2% -4.4% -2.6% Global NA WE China Source: PPPC Global

13 SO WHAT CAN WE EXPECT IN 2017? ( 000 t) BHKP CAPACITY CHANGES FIBRIA EXPECTED SCENARIO FOR 2017 AT END OF 2016 FIBRIA EXPECTED SCENARIO FOR 2017, TODAY: Klabin APP OKI Fibria TLS II Metsa APRIL Kerinci APRIL Rizhao Taiwan P&P Resolute Calhoun ,000 Klabin APP OKI Fibria TLS II Metsa APRIL Kerinci APRIL Rizhao APRIL Jiangmen Taiwan P&P Resolute Calhoun , APRIL -1,080 (2) Navigator Cacia Unexpected Closures, Unexpected Closures, Conversions and Downtime CMPC Unexpected Closures, Conversions Unexpected and Downtime Closures, Net 800 Net 275 BEKP demand growth¹ 1,350 BEKP demand growth¹ 1,350 OKI s output in 2017 fully offset by APRIL s conversions/integrations (1) Fibria s estimates (2) Kerinci integration P&W / Rizhao conversion DP and 20,000 tons of temporary downtime / Jiangmen integration P&W 13

14 We don t think so! Because, we expect a combination of the following factors: Not only, a good «BEKP Demand/Net Capacity increase» ratio: 1.75, which is well above the last 3 years But also, a more WIDESPREAD demand between the regions! USA: a recovery of the demand for Eucalyptus mainly triggered by a few local HW closures (temporarily or not) Europe: a recovery of the HW demand due to increasing competitiveness of the European papermakers Euro devaluation... US$/Euro parity!? US$ strengthening / loss of competitiveness of local pulp producers (integrated or not) China: an on-going increase of the demand for Eucalyptus Pulp New paper capacities: 2.3 million tons/y of which: Tissue = 600 kton/y UWF = 400 Kton/y On-going substitution of non wood fibers and old pulp mills 14

15 Jan-13 Apr-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Global Market BEKP Demand Shipments of Hardwood and Eucalyptus Pulp 1Q17 vs. 1Q16 (1) Days of Supply - Hardwood (1) 8% 573 kt Total 8% % 411 kt kt 360-5% 1% -4% -5% kt -33 kt 5 kt -100 kt-100 kt North America 129 kt 146 kt West Europe China Others BHKP BEKP 24% Avg=40 6% 12% 37 CAGR BEKP (2) 2016 vs (2) 12% 2,073 kt Total 6% 109 kt North America 5% 351 kt Western Europe 29% 1,275 kt China 7% 338 kt Others 4% 1,655 1,247 kt kt Total 8% -5% 2% -158 kt 42 kt North America -3% -3% kt kt Western Europe BHKP BEKP 24% 15% 1,543 1,350 kt kt China 4% 6% 325 kt 303 kt Others (1) Source: PPPC Global 100 March/2017 (2) Source: PPPC Global 100 December/

16 Global Market (US$) BHKP FOEX China¹ ( US$) BHKP Demand 4Q vs. 1Q China² +14% -11% -7% -15% -5% -0% + 10% 1,508 kt 1,727 kt 2,132 kt 1,897 kt 2,022 kt 1,889 kt 2,272 kt 1,922 kt 2,382 kt 2,254 kt 2,371 kt 2,368 kt 2,688 kt 2,944 kt 4Q10 1Q11 4Q11 1Q12 4Q12 1Q13 4Q13 1Q14 4Q14 1Q15 4Q15 1Q16 4Q16 1Q17 +41% -5% +12% +5% -0% +13% (1) Source: Bloomberg (2) Source: PPPC Global

17 Technical Age and Scale in the Pulp Industry Further closures are expected due to lack of adequate investments in the industry Source: Poyry 17 Hardwood (BHKP) Producers Integrated and Market Pulp Mills Softwood (BSKP) Producers Integrated and Market Pulp Mills 2000 PM Capacity, 1000 t/a Aracruz Weighted average technical age 12.3 years STRONG PM Capacity, 1000 t/a Weighted average technical age 21 years STRONG Veracel Weighted average capacity 1,350,000 t/a Jacareí Três Lagoas 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.

18 Capacity closures DO happen Closures of Hardwood Market Pulp Capacity Worldwide (000 ton) ,260-1,180-1,085-1,410 (1) Closures do not include temporary movements. Potential Additional Conversions (2) (1) Closures/conversion/integration 2016: -25 kt Guangdong Dingfeng, -30 kt Verso Wickliffe, -200 kt APRIL Kenrinci, -80 kt Taiwan P&P, -110 kt Woodland, -20 kt BILT, -205 kt IP. (2) Closures/conversion/integration 2017: -55 kt Taiwan P&P, -40 Resolute Calhoum, -250 kt APRIL RIZHAO, -390 APRIL Kenrinci, -420 APRIL Jiangmen. 2018: -60 kt Navigator, -125 Mondi, -70 APRIL RIZHAO. Source: Poyry, PPPC, RISI and Public information. 18

19 More Competitive Cash Cost with H2 BHKP (US$/t) BHKP capacity ( 000 t) 1,040 1,675 1,100 2,325 4,915 4,060 16,265 TOTAL: 31, WC=($62/t) Interest Capex Income tax SG&A USA China Canada Iberia Chile/Uruguay Indonesia Brazil Fibria 1Q17 LTM Estimated Fibria w/ H Cash Production Cost (US$/t) Delivery CIF Europe Sources: Hawkins Wright (Production Costs April 2017) and Fibria s 1Q17 Earnings Release-FX considered at R$/US$ = 3.12 (Brazil and Fibria). 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. 19

20 New Capacity Investment Pipeline No major new capacity announced after OKI and H2 projects ,5 Pulp prices - CIF Europe (US$/ton) (2) Valdivia APP Hainan Mucui Veracel Nueva Aldea Santa Fé Fray Bentos Kerinci PL3 Rizhao Três Lagoas APP Guangxi Chenming Zhanjiang Eldorado Maranhão Monte s del Plata Oji Nantong APP South Sumatra (1) Guaíba II Klabin Horizonte 675 Metsa ,5 1 0,5 Capacity Additions ( 000 ton) (2) ,400 kt 5,250 kt BHKP BHKP adjusted by CPI (1) Partially integrated production. (2) Sources: Hawkins Wright, Poyry and Fibria Analysis. Pulp price estimates according to RISI (Jan/17)

21 Feb-00 May-00 Aug-00 Nov-00 Feb-01 May-01 Aug-01 Nov-01 Feb-02 May-02 Aug-02 Nov-02 Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Sep-08 Dec-08 Mar-09 Jun-09 Sep-09 Dec-09 Mar-10 Jun-10 Sep-10 Dec-10 Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 Jun-12 Sep-12 Dec-12 Mar-13 Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15 Nov-15 Feb-16 May-16 Aug-16 Nov-16 Feb-17 May-17 Source: Bloomberg May 23 th, In the last 15 years, pulp volatility has been just 8%...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 Lower dependency on Asian market (~25%) compared to hard commodities (70%+) Market end users are linked to consumer goods, such as tissue Incipient pulp price futures market and low liquidity

22 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 Lowest volatility among commodities = January 1, Iron Ore Soy Bean Crude Oil Sugar BHKP - FOEX Europe Exchange Rate (R$/US$) Historical Volatility of Commodities (US$) 2 Lower than FX 37% 34% 34% 28% 26% 25% 24% 23% 17% 14% 6% WTI Crude Oil Sugar Nickel Iron Ore Copper Soy Ibovespa LME Metals Cattle FX BHKP Low volatility of hardwood pulp price, even though new capacities have come on stream during the period. Source: Bloomberg May 23 th, Since January 1, 2009 up to May 23 th,

23 Financial and Operational Highlights 23

24 Each 5% depreciation of the Real increases EBITDA by around R$420m and FCF by R$550m (1) 2017 and 2018 according to Focus Report (Brazilian Central Bank May 19 th, 2017) (2) 2017 and 2018 according market consensus 24 Exchange Rate Average¹ (R$/US$) Fibria net pulp price² (US$/t) Fibria net pulp price (R$/t) 912 1,179 1,067 1,133 1,311 1,344 1,951 1,731 1,638 1,617 1,609 EBITDA Margin 29% % 1,488 34% 36% 1,173 1,153 40% 39% 1,295 1,185 53% 1,560 43% 1,073 38% 949 EBITDA (US$ million) Q17LTM 2017(e) 2018(e)

25 Cash Production Cost (R$/t) 1Q17 1Q17 vs 1Q16 Ex-downtimes +1.8% (16) (9) (3) 1Q16 Inflation FX Non recurring wood Chemicals and energy Energy sales Other 1Q17 Transportation mix (higher road contribution) Higher operational efficiency Cash Production Cost Ex-downtimes (R$/t) Cash Production Cost (R$/t) +4.9% Average distance 4Q16 Wood Inflation/FX Other 1Q km 308 km 1Q16 4Q16 1Q17 Maintenance downtimes impact Cash production cost w/o downtimes 25

26 (1) Excludes Conpacel 26 Cash Production Cost in dollars saw a decrease over the last years 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) Q17 LTM Wood Energy price Input consumption

27 27 Net Results (US$ million) 1Q17 Cash (146) 644 MtM effect (436) deferred current (61) 329 Adjusted EBITDA FX Debt MtM hedge Net interest Deprec., amortiz. and depletion (1) Income Taxes Others Net income Non-recurring effects (1) Includes other Exchange rate/monetary variations, other financial income/expense and other operating income/expenses

28 (1) Does not consider Horizonte 2 Project and pulp logistics projects. (2) Includes Klabin volume. 28 Free Cash Flow (1) - 1Q17 (US$ million) 644 Klabin effect 282 (9) (463) (34) Adjusted EBITDA Capex (ex-h2 and logistics projects) Net interest Working Capital Income Taxes Others FCF H2 interest paid: R$ 20 million

29 Indebtdeness 1Q17 Gross Debt and Cash Position (million) Net Debt (Million) and Leverage 16,153 H2 CRA 4,956 Dec/16 Gross debt H2 CRA 18,329 H2 CRA R$ US$ Mar/17 5,785 H2 CRA Cash position +37% 4,717 1,447 Dez/16 R$ US$ 6,477 CRA 2,044 CRA Mar/17 Net debt/ebitda (R$) Net debt/ebitda (US$) ,309 11,435 11,851 2,897 3,509 3,587 Mar/16 Dec/16 Mar/17 R$ US$ Interest Expense/Income (US$ million), Cost of Debt in US$(1) and Debt maturity Debt Maturity (months) LTM 1Q17 Average Cost of cost debt in US$ (% p.a.) Interest Expense (Gross) Interest on Financial Investments 1Q16 4Q16 1Q17 (1) 3.4 Considering 3.3 the portion (1) of debt in reais fully adjusted by the market swap curves at the end of each period 29

30 Agribusiness Credit Receivable Certificates 31, 2017 CRA accounted for 22% of the total debt The largest CRA issuer in Brazil (R$ 3,975 million; Av. cost 98%) %CDI 106% 104% 102% Av. interest rate of financial investments (1) 100% 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 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) (1) Refer to note 7 cash and cash equivalents in 1Q17 Financial Statements 30

31 Robust Liquidity USD million 31, 2017) (1) FX 3,168 (2) Capex to be executed on Horizonte 2 Project (3) Related to the agreement with Klabin 31 Revolver 2, Pre-payment NCE Finnvera BNDES Bonds CRA and Other Cash on hand (1) 2, Liquidity Capex H2 (2) : (1) Not including US$77 million related to MtM of hedging transactions. (2) Financial execution of US$1,381 million capex up to March FX (R$/US$) 2017: : Horizonte 2 Funding (US$ billion¹) 3Q Q Q Excess of US$0.1 bi Horizonte 2 Project US$2.3 bi Export Prepayment CRA BNDES FDCO ECA Working capital release 3 Funds withdrawn until Mar 31, Contracted funds to be withdraw Total

32 32 Initiatives for Leverage Management Initiatives expected to be implemented in the short term Initiatives under analysis Amount (USD million) Net Debt/EBITDA reduction (x) Amount (USD million) Net Debt/EBITDA reduction (x) Working Capital Release x Accounts receivable (customers) x Accounts payable (suppliers) x Capex x Accounts payable (suppliers) x Others x Total x Forestry x Capex H x Total x Total: USD 721 million (0.68x)

33 WAIVER ON 4.5X COVENANT WAS FULLY NEGOTIATED Horizonte 2 start-up in 3Q17 boosts EBITDA and FCF generation Leverage guidelines: Highlights: Range of 2.0x to 2.5x net debt/ebitda Maximum 3.5x net debt/ebitda during expansion cycles 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 (1) As stated on the Liquidity and Indebtedness Policy and Shareholders Agreement 33

34 (1) Fibria s historical data in BRL. The period in bold represents the projects capex execution. 34 Capital Structure Net Debt/EBITDA (x) (1) 8.1 Puma Maranhão Montes del Plata Guaíba II Horizonte Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 Fibria Suzano Klabin CMPC Arauco Eldorado Fibria Arauco CMPC Klabin Suzano S&P BBB-/Negative BBB-/Stable BBB-/Stable BB+/Stable BB+/Stable Moody s Ba1/Stable Baa3/Stable Baa3/Stable - Ba1/Stable Fitch BBB-/Stable BBB/Stable BBB+/Stable BB+/Stable BB+/Positive

35 (1) G-spread on May 19 th, One of the best performances among Brazilian corporate issuers (1) Historical G-spread (bps) Rating BBB- BBB- Outlook Negative Stable Fibria % Fibria % Fibria % Issuance with maturity in 2024 Issuance with maturity in ,

36 2017 OUTLOOK CAPEX AND CASH COST 36

37 Fibria CAPEX 2017 BRL million 3, ,213 2, Industry Forestry 415 1, CAPEX Maintenance Logistics Projects Modernization H2 (2) Others 2017 CAPEX Total Guidance USD632 mn (1) USD1,639 mn (1) (1) Converted at 2017 average FX - BRL/USD 3.18, according to Focus Report (Brazilian Central Bank Mar 31th, 2017) (2) Included R&D, IT, Health Safety and Environmental. 37

38 38 Cash Cost update BRL/USD (26) (19) (2) (1) (3) 155 LTM 3Q16 Horizonte 2 Project Wood cost reduction Bleaching line B Maritime wood shipping project Others 2021 FX Sensitivity FX Cash cost (US$/t)

39 Expansion Project Horizonte 2 39

40 40 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

41 HORIZONTE 2 PROJECT Site Overview Start-up brought forward: 1 month anticipation Expansion Capex of US$ 2,280 million (US$ 1,169/t) Inside the fence (1) Capex of US$ 979/t Energy Surplus 130 MWh (1) Industrial capex. (2) At March 31, (3) Approximate cash disbursement up to March 31, Over 87% physically completed (2) 61% (3) of financial execution (R$ 4.6 billion) 41 41

42 Nominal Capacity ( 000 t) Pulp sales destinations 7,955 8,050 8,150 8,150 8,150 6, ,755 1,850 1,950 1,950 1,950 19% 22% 37% 36% 36% 32% 5,300 5,300 5,300 5,300 5,300 5,300 8% 10% Klabin's Puma Project ('000 t)(1)³ Horizonte 2 ('000 t)³ Current Production ('000 t) Total sales volume distribution after H2 start up (1) Current net revenue distribution (2) (1) Includes Klabin s sales volume (2) Considers 4Q16 last twelve months (3) The volumes in 2017 and 2018 will depend on the learning curve of the plants. The agreement with Klabin may be renewed by mutual consent. 42

43 Horizonte 2 Forestry Base Forestry base secured as planned Already planted To be planted Total Wood purchased 135,000 ha 52,000 ha 187,000 ha 7.4 million m 3 42,000 ha to be planted in ,000 ha to be planted in 2018 Average distance from forest to mill H1 + H2 up to 100 km 43

44 Logistics Integrated logistics - outbound and shipping 44 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

45 HORIZONTE 2 CAPEX Fully funded with low cost lines and disbursement flexibility (1) Total R$ 7,514 mn US$ 2,247mn (1) CAPEX EXECUTION TIMETABLE (R$ million) 4,027 Accrual basis 3,775 Cash basis 2,759 2, Management initiatives US$ 61 mn 1,128mn 759 mn 298 mn 8,745 7,514 Executed 4,575 To be disbursed 2,939 November, 2015 USD 2,214 BRL/USD 3.95 Savings, Contingencies and indirect costs FX Inflation Others March, 2017 USD 2,247 BRL/USD 3.34

46 Funding Cost and maturity (1) Swap Bloomberg (2) FX 31/3/17: (3) Does not include MtM related to hedging transactions 46 1Q17 H2 1Q17 + H2 Average Cost (US$ p.a) (1) 3.8% 2.9% 3.7% Average Maturity (years) Amortization Schedule (2) 1Q17 Proforma with TLS II US$ million 2,669 Revolver 548 Cash (3) 2, , Cash Caixa BNDES Bond EPP ECN Outros Others CRA Finnvera Finame Development Agencies (FCO, Finep & FDCO) BNB Total

47 47 Horizonte 2 project assumptions UNIT R$ US$ Pulp production/year k tons 1,950 1,950 Expansion capex (1) $ billion Expansion capex (1) $/t 3,841 1,164 Inside the fence expansion capex $/t 3, Sustaining capex (2) $/t Cash production cost (3) $/t Energy surplus MWh Project approval FX R$/US$ All in cash cost (estimated range) (4) $/t Pulp price (5) $/t Free Cash Flow (estimated) $/t Payback period (estimated) years (1) Includes chemical leasing 3.30). (2) Estimated sustaining capex in perpetuity 3.30). (3) Estimated weighted average cost, after mill balance. Includes energy sales 3.12). (4) Cash cost + freight + SG&A + Sustaining Capex + Interest + taxes + working capital 3.12) (5) 2017 market consensus.

48 48 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

49 BACK UP 49

50 Cost reduction initiatives and industry statistics 50

51 69 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) Startup: Set/2017 Saving OPEX: R$ 24 million/year

52 Third-party wood (%) THIRD-PARTY WOOD REDUCTION Non-recurring impacts starting to decrease % Planting 34% 63% 73% 67% 68% 75% 67% 50% % 40% 35% 30% 25% 20% 15% 10% 5% Average distance from forest to mill Third-party wood Average distance from forest to mill (km) 0% Third party wood increase from previous forecast due to recent rain shortage at Aracruz Unit forest base and optimization of Três Lagoas forest base The average distance will drop sharply generating an Opex reduction NPV from peak to normalized level (2) : CAPEX: BRL1.5 billion (USD 0.5 million) OPEX: BRL 1.0 billion (USD 0.3 million) (1) Does not include Veracel but considers H2 Project forest base (2) BRL/USD3.30. Total NPV: BRL2.5 Bn or USD0.8 Bn 52

53 Third-party wood reduction Losango Most part of the standing wood was already paid Despite the higher forest to mill distance, the wood from Losango is less expensive than the available wood from around Espírito Santo and Bahia States Positive impact over industrial costs due to better productivity 56

54 57 Industrial: maintenance downtimes schedule change 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

55 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) Demand growth rate CAGR: Hardwood: +3.06% Softwood: +1.16% 000 ton Growth Growth Hardwood % 42% Eucalyptus % 58% Softwood % 16% Source: PPPC report (Nov. 2016) Hardwood Softwood Market Pulp % 30% Source: PPPC reports. Excludes Sulphite and UKP market pulp (Nov./16) Paper Production Runnability with BHKP

56 Benefiting From China s Growth 2,369 China s Hardwood Imports of BHKP by Country (1) ( 000s t) 2,944 BHKP Total 1,660 1,292 Latin America (1) 1Q Q17 Latin America is the leading exporter of BHKP to China, accounting to approximately 56% of China's total imports in 1Q17 (1) includes South Africa and New Zealand. (2) Includes China, Japan, Malaysia, Russia, Thailand and Vietnam Indonesia Others(2) USA Canada Western Europe (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 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% (million t) 16 26% 14 Eucalyptus Hardwood Total % Compared to the global Market Pulp (1) PPPC Pulp China Flash Report March 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 Japan Oceania East Europe LatAm China Africa 1 56

57 Growth rate Chinese GDP vs. Eucalyptus Shipments to China (Sept-09 = base 100) China GDP Eucalyptus Shipments Source: Bloomberg and PPPC W20 report (Mar/2017) 57

58 E 2016E 2017E 2018E 2019E 2020E E 2016E 2017E 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 58

59 mai-10 jun-10 jul-10 ago-10 set-10 out-10 nov-10 dez-10 jan-11 fev-11 mar-11 mai-11 jun-11 jul-11 ago-11 set-11 out-11 nov-11 dez-11 jan-12 fev-12 mar-12 abr-12 jun-12 jul-12 ago-12 set-12 out-12 nov-12 dez-12 jan-13 fev-13 mar-13 abr-13 mai-13 jul-13 ago-13 set-13 out-13 nov-13 dez-13 jan-14 fev-14 mar-14 abr-14 mai-14 jun-14 ago-14 set-14 out-14 nov-14 dez-14 jan-15 fev-15 mar-15 abr-15 mai-15 jun-15 jul-15 set-15 out-15 nov-15 dez-15 jan-16 fev-16 mar-16 abr-16 mai-16 jun-16 jul-16 ago-16 out-16 nov-16 dez-16 jan-17 fev-17 mar-17 abr-17 BHKP prices - CIF China (US$/ton) Shipments (000 ton) Benefiting From China s Growth Source: PPPC Global 100 mar 2017 ( 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 689 ktons 59

60 Source: Pöyry. USD/Adt, 2013 cost level 60 Global BHKP Market Pulp Supply Cost Curve COST CURVE EVOLUTION Cost position of marginal producer Cumulative Capacity Million t/a

61 Tightening plantation wood and chip supply could add to the cash cost of Asian pulp mills Source: Pöyry. USD/Adt, 2013 cost level 61 Cumulative Capacity Million t/a

62 Growth in Asia is empowered by urbanization and increasing disposable income Source: Pöyry. 62

63 Source: Pöyry. 63 The share of non-wood pulp will decline

64 Current Zero Cost Collars Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Notional (US$ million) Strike put avg. (R$/US$) 3,29 3,30 3,39 3,28 3,22 3,17 3,21 Strike call avg. (R$/US$) 5,33 5,33 5,70 4,58 4,40 4,08 4,18 FWD 3,84 3,84 3,98 3,69 3,64 3,47 3,52 Notional Total US$ 2,311MM (*) As of May 18,

65 EVOLUTION OF CURRENCIES FX devaluation is expected 115% 110% 105% 100% 95% 90% 85% 80% 75% May/17 mai-16 Aug/16 ago-16 nov-16 Nov/16 fev-17 Feb/17 mai-17 May/17 ago-17 Aug/17 Nov/17 nov-17 Feb/18 fev-18 mai-18 May/18 ago-18 Aug/18 Nov/18 nov-18 Feb/19 fev-19 mai-19 May/19 ago-19 Aug/19 nov-19 Nov/19 Real** Real Euro** Euro CAD** CAD Chilean Peso Chileno** peso** Chilean Peso Chileno peso RMB** RMB Rupia** Rupia Uruguayan Peso Uruguaio** peso** Peso Uruguayan Uruguaio peso ** Bloomberg Forecast May 17,

66 FREE CASH FLOW (1) Positive quarterly FCF in the last 5 years, even during appreciated FX USD million Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 EBITDA Margin 28% 30% 37% 37% 41% 39% 39% 41% 42% 41% 35% 35% 45% 50% 50% 56% 54% 52% 43% 43% 36% 37% Average FX (1) Excluding H2 Project, dividends, pulp logistics and land purchase effects. 66

67 (1) Considering FX (2) Considering average FX for the period 67 Fibria s tax structure Description and Amount¹ Maturity (a) Operating income As stated in the income statement (-)(b) Goodwill (Aracruz acquisition) - Annual tax deduction: US$ 28 million (tax) - Remaining Balance Mar/17: US$ billion (base) 2018 (-)(c) Forestry Capex in MS state (net) (+/-)(d) Exchange variation (cash) 2017 tax deduction related to depletion: US$ 8.4 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/17: US$ 395 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/2017: - PIS/COFINS: US$ 252 million - Withholding tax (IR and CSLL): US$ 328 million - Reintegra: US$ 35 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 US$ 23 million US$ 36 million US$ 37 million

68 Dividends 68

69 69 Dividends Commitment to Corporate Governance best practices. Proposed dividends based on cash generation, taking into consideration the company s strategic planning and in line with its policies, notably the Indebtness and Risk Management policies. Preserving Investment Grade. Extraordinary dividend if Policy criteria are met April 28, 2017 May 18, 2017 Mid-November, 2017 Mid-December, 2017 GSM to approved dividend distribution (approved R$393 million) Dividend payment of R$ 393 million Extraordinary dividend appraisal Extraordinary dividend payment (if approved)

70 Green Bond

71 71 Bond Offering Summary Issuer Guarantor Issue Format Ratings Ranking Use of Proceeds Issue Amount Fibria Overseas Finance Ltd. Fibria Celulose S.A. SEC Registered BBB- (neg) / BBB- (stb) Senior Unsecured Eligible Green Projects US$700 million Securities Offered 5.5% Senior Notes due 2027 Book Listing Book US$3.5 billion New York Stock Exchange (NYSE) US$3.5 billion