18 th Annual Santander Brazil Conference - Corporate Presentation. August, 2017

Transcription

1 18 th Annual Santander Brazil Conference - Corporate Presentation August, 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 41.33% + Treasury 0.16% 5 Shareholder Structure and Corporate Governance Votorantim S.A. (1) 29.42% BNDES Participações (1) 29.08% Free Float (2) 41.33% 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 2Q17 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 3.75 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 (1) Veracel is a joint operation 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 1

8 8 Fibria s Commercial Strategy Sales Mix by Region and by End Use - Fibria Highlights Region 2Q17 North America 20% Europe Asia 34% 36% Latin America 10% End Use 2Q17 Tissue 49% Printing & Writing 32% Specialties 19% 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% 36% 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% 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 18% 82% Mechanical 28 million t Chemical 142 million t 59% Integrated Mills 83 million t 41% Market Pulp 59 million t 46% 54% Softwood/Other 27 million t Hardwood 32 million t 33% 67% Acacia/Other 9 million t Eucalyptus 23 million t 77% Other Eucalyptus Pulp producers: 17 million t 23% (1) Fiber Consumption, Recycled Fiber and Pulp: RISI Market Pulp, Hardwood and Eucalyptus: PPPC SRN May

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 Q17 2Q 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 11

12 Source: PPPC Global 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

13 (1) Fibria s estimates (2) Kerinci integration to P&W Rizhao conversion to DP and 20,000 tons of temporary downtime Jiangmen integration to P&W 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

14 14 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

15 Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Apr-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Jan-14 Mar-14 May-14 Jun-14 Aug-14 Oct-14 Dec-14 Feb-15 Apr-15 Jun-15 Aug-15 Oct-15 Dec-15 Feb-16 Apr-16 Jun-16 Aug-16 Oct-16 Dec-16 Feb-17 Apr-17 Jun-17 Global Market BEKP Demand Shipments of Hardwood and Eucalyptus Pulp 6M17 vs.6m16 (1) Operating Rate (shipments to capacity) Hardwood (1) 5% 772 kt Total 5% 650 kt 5% -1% -2% -2% -11 kt 46 kt North America -89 kt -76 kt 671 kt 201 kt 330 kt West Europe China Others BHKP BEKP 13% 7% 260 kt 4% 13% 105% 99% 100% 95% 90% Avg = 91% 85% 80% 75% 70% CAGR BEKP (2) Hardwood inventories in days (1) 12% 2,073 kt Total 6% 109 kt North America 5% 351 kt Western Europe 29% 1,275 kt China 7% 338 kt Others Avg=40 37 (1) Source: PPPC G100 Jun/2017 (2) Source: PPPC Global 100 December/

16 Technical Age and Scale in the Pulp Industry Further closures are expected due to lack of adequate investments in the industry Source: Poyry 16 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 600 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.

17 Capacity closures DO happen Closures of Hardwood Market Pulp Capacity Worldwide (000 ton) ,260-1,180-1,085-1,410 (1) Source: Poyry, PPPC, RISI and Public information. Closures do not include temporary movements. (approx. 840 kt in 2017) Potential Additional Conversions (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 (-1,155 kt): -55 kt Taiwan P&P, -40 kt Resolute Calhoum, -250 kt APRIL RIZHAO, -390 kt APRIL Kenrinci, -420 kt APRIL Jiangmen (-255 kt): -60 kt Navigator, -125 kt Mondi, -70 kt APRIL RIZHAO. (2) 17

18 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=($52/t) US$ Interest Capex Income tax SG&A USA China Canada Iberia Chile/Uruguay Indonesia Brazil Fibria 2Q17 LTM Estimated Fibria w/ H Cash Production Cost (US$/t) Delivery CIF Europe Sources: Hawkins Wright (Production Costs April 2017) and Fibria s 2Q17 Earnings Release-FX considered at R$/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. 18

19 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 Mucuri 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 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)

20 Mar-00 Jun-00 Sep-00 Dec-00 Mar-01 Jun-01 Sep-01 Dec-01 Mar-02 Jun-02 Sep-02 Nov-02 Feb-03 May-03 Aug-03 Nov-03 Feb-04 May-04 Aug-04 Nov-04 Feb-05 May-05 Aug-05 Nov-05 Feb-06 May-06 Aug-06 Nov-06 Feb-07 May-07 Aug-07 Nov-07 Feb-08 May-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-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 Jun-17 Source: Bloomberg Aug 14 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 compared to hard commodities Market end users are linked to consumer goods, such as tissue Incipient pulp price futures market and low liquidity

21 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 Lowest volatility among commodities¹ = January 1, Iron Ore Soy Bean Crude Oil Sugar BHKP - FOEX Europe Exchange Rate (R$/US$) 37% 34% 34% Historical Volatility of Commodities (US$) 2 Lower than FX 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. (1) Bloomberg up to Aug 14 th, 2017 (2) Since January 1, 2009 up to Aug 14 th,

22 Financial and Operational Highlights 22

23 Each 5% depreciation of the Real increases EBITDA by around R$454m and FCF by R$540m (1) 2017 and 2018 according to Focus Report (Brazilian Central Bank Aug 11, 2017) (2) 2017 and 2018 according market consensus (3) Not considering the effect of Klabin sales 23 Exchange Rate Average¹ (R$/US$) Fibria net pulp price² (US$/t) Fibria net pulp price (R$/t) 912 1,179 1,067 1,133 1,311 1,344 1,951 1,731 1,638 1,745 1,723 EBITDA Margin³ 29% % 1,488 34% 36% 1,173 1,153 40% 39% 1,295 1,185 53% 1,560 43% 41% 1,073 1,019 EBITDA (US$ million) Q17 LTM 2017(e) 2018(e)

24 24 Cash Production Cost (R$/t) 2Q17 2Q17 vs 2Q16 Ex-downtimes (8) 660 (6) (23) (4) 2Q16 Inflation FX Non recurring wood Lower chemicals and energy consumption Energy sales Others 2Q17 Higher operational efficiency Utilities result: 2Q16: R$ 4/t 1Q17: R$ 9/t 2Q17: R$ 27/t Cash Production Cost (R$/t) Cash production cost ex-downtimes (R$/t) % (7) (21) Q16 1Q17 2Q17 Maintenance downtime impact Cash production cost ex-downtimes 1Q17 Wood Inflation/FX Operational Avg efficiency distance 308 (km): Energy sales Others 2Q17 328

25 (1) Excludes Conpacel 25 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) Q17 LTM Wood Energy price Input consumption

26 26 Net Results (US$ million) 2Q (495) (180) (122) 244 (544) (233) (259) Adjusted EBITDA FX debt MtM hedge Net interest Deprec., amortiz. and depletion (1) Income taxes Others Net result Non-recurring effects (1) Includes other Exchange rate/monetary variations, other financial income/expense and other operating income/expenses. The higher effect in this quarter corresponds to the variation from the reappraisal of biological assets that totaled R$211 million.

27 (1) Not considering capex related to Horizonte 2 project and pulp logistics projects. 27 Free Cash Flow (1) - 2Q17 and LTM (US$ million) Q17 Includes interest paid from H2, 2024 bond and CRA (510) (273) (26) (9) Adjusted EBITDA Capex (ex-h2 and logistics projects) Net interest Working capital Income taxes Others FCF LTM 2Q17 (2,136) (557) 945 (101) Adjusted EBITDA Capex (ex-h2 and logistics projects) Net interest Working capital Income taxes FCF

28 2Q17 Indebtedness Gross debt and cash position (million) 18,329 18,788 H2 CRA Gross debt 5,785 5,679 H2 CRA H2 CRA H2 CRA Cash position 6,963 6,184 2,198 1,869 CRA CRA CRA CRA Net debt (million) and leverage Net debt/ebitda (R$) Net debt/ebitda (US$) ,366 12,604 3,587 3,810 Mar/17 R$ US$ Jun/17 Mar/17 R$ US$ Jun/17 Mar/17 R$ US$ Jun/17 Interest expense/revenue (US$ million) and interest coverage Cost of debt in US$ (1) and debt maturity LTM 2Q Interest gross expense Interest on financial investments 4.6 Interest Cost coverage of debt (x) 4.6 (2) 2Q16 1Q17 2Q17 Average Cost of cost debt in US$ (% p.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 EBITDA/LTM net 3.4 interest 3.3 (1) 28

29 Agribusiness Credit Receivable Certificates 30, 2017 CRA accounted for 21% 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 2Q17 Financial Statements 29

30 Robust Liquidity USD million 30, 2017) Liquidity (1) and debt amortization schedule (US$ million) 2,436 Pre-payment NCE BNDES Bonds Revolver 582 Finnvera CRA and others Cash on hand (1) 1, Liquidez Capex H2 (2) : (1) Not including US$15 million related to MtM of hedging transactions. (2) Financial execution of US$1,530 million (cash) capex up to June FX (R$/US$) 2017 e 2018: Funding Horizonte 2 Project (US$ billion) 3Q15 0,4 3Q Q Q ,9 Excess of US$0.1 bi Horizonte 2 Project US$2.2 bi Pre-payment CRA BNDES FDCO ECA Working capital (4) Total Funds withdrawn until June 30, 2017 Contracted funds to be withdrawn (3) Capex to be executed (cash) related to Horizonte 2 project. (4) Related to the agreement with Klabin 30

31 WAIVER ON 4.5X COVENANT WAS FULLY NEGOTIATED Horizonte 2 start-up in 3Q17 boosts EBITDA and FCF generation NET DEBT/EBITDA (USD) Actual (in US$) Covenant level Waiver x Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q Indebtness and Liquidity limits (1) 2.0x 2.5x 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 (1) As stated on the Liquidity and Indebtedness Policy and Shareholders Agreement 31

32 (1) Fibria s historical data in BRL. The period in bold represents companies expansion capex execution. 32 Capital Structure 8.1 Net Debt/EBITDA (x) (1) Puma Maranhão Montes del Plata Guaíba II Horizonte 2 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Fibria Suzano Klabin CMPC Arauco Eldorado Fibria Arauco CMPC Klabin Suzano S&P BBB-/Negative BBB-/Stable BBB-/Stable BB+/Stable BB+/Positive Moody s Ba1/Negative Baa3/Stable Baa3/Stable - Ba1/Negative Fitch BBB-/Stable BBB/Negative BBB+/Negative BB+/Stable BB+/Positive

33 (1) G-spread on Aug 11 th, One of the best performances among Brazilian corporate issuers (1) Historical G-spread (bps) Rating Outlook BBB- Negative BBB- Stable Fibria % Fibria % Fibria % Issuance with maturity in 2024 Issuance with maturity in

34 ROE and ROIC (R$) ROE = Adjusted EBIT (1) / Equity before IAS 41 (2) and ROIC = Adjusted EBIT (3) / Invested Capital before IAS 41 (2) ROE ROIC 25.1% 15.6% 4.7% 3.4% 5.7% 6.1% 6.2% 5.6% 9.8% 6.9% 3.5% 4.0% 9,4% 9,0% Q17 LTM 2Q17 Annualized Average FX (R$/US$) Average Net Pulp Price (US$) (1) Adjusted EBITDA CAPEX Net Interest Taxes (2) International accounting standards for biological assets. (3) Adjusted EBITDA CAPEX Taxes 34

35 2017 OUTLOOK CAPEX AND CASH COST 35

36 Fibria CAPEX 2017 BRL million 3, ,213 2, Industry Forestry 415 1, CAPEX Maintenance Logistics Projects Modernization H2 (2) Others 2017 CAPEX Total Guidance USD 620 mn (1) USD1,609 mn (1) (1) Converted at 2017 average FX - BRL/USD 3.24, according to Focus Report (Brazilian Central Bank Jun 16th, 2017) (2) Includes R&D, IT, Health Safety and Environmental expenses 36

37 Structural CAPEX BRL million 2,055 2,068 1,662 USD 632 M (1) USD 608 M (1) USD 489 M (1) 2017 (2) Guidance Modernization Non-recurring wood purchase Forestry equipments Non-recurring projects Turbogenerator overhaul Structural capex H2 sustaining capex Structural capex with H2 (1) Converted at 2017 average FX - BRL/USD According to Focus Report (Brazilian Central Bank Jun 16th, 2016) (2) November/2016 estimate. Includes modernization expenses 37

38 Cash Cost 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$ 2,247 million (US$ 1,152/t) Inside the fence (1) Capex of US$ 979/t Energy Surplus 130 MWh (1) Industrial capex. (2) At June 30, (3) Approximate cash disbursement up to June 30, Over 96% physically completed (2) 69% (3) of financial execution (R$ 5.1 billion) 41 41

42 6,577 Nominal Capacity ( 000 t) 7,955 8,050 8,150 8,150 8, ,755 1,850 1,950 1,950 1, ,300 5,300 5,300 5,300 5,300 5, ESTIMATED MARKET BHKP CAPACITY RANKING 2017 (000T) Fibria 8,150 APP Suzano April CMPC UPM Eldorado Arauco Stora Enso Cenibra Ence Altri Mondi Marubeni 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: RISI, Hawkins Wright, PPPC and Fibria (Nov 2016) (1) 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 Pulp sales destination: Fibria growing where the market grows 37% 34% 19% 17% 36% 39% 8% 10% Current net revenue distribution (1) Total sales volume distribution after H2 start up (2) (1) Considers 2Q17 last twelve months. (2) Includes Klabin s sales volume 43

44 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 44

45 Logistics Integrated logistics - outbound and shipping 45 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

46 HORIZONTE 2 CAPEX Disbursement flexibility and reduction from 2015 (1) CAPEX TIMELINE (R$ million) Total 3,774 Capex to be disbursed Capex disbursed 2,553 R$ 7,526 mn US$ 2,226 mn (1) 205 1,357 1, US$ 61 mn 1,116mn 755 mn 294 mn 8,745 7,526 Executed To be disbursed 5,175 2,351 November, 2015 USD 2,214 BRL/USD 3.95 Savings, Contingencies and indirect costs FX Inflation Others June, 2017 USD 2,226 BRL/USD 3.38

47 Funding Cost and maturity (1) Swap Bloomberg (2) 30, 2017: (3) Does not include MtM related to hedging transactions 47 2Q17 H2 2Q17 + H2 Average Cost (US$ p.a) (1) 3.7% 3.1% 3.6% Average Maturity (years) Amortization Schedule (2) 2Q17 Proforma with TLS II US$ million 2,436 Revolver 582 Cash (3) 1, , Caixa Cash BNDES Bond EPP ECN Others Outros CRA Finnvera Finame Development Agencies (FCO, Finep & FDCO) BNB Total

48 48 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.

49 49 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

50 BACK UP 50

51 54 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

52 Third-party wood ¹ (%) Third-party wood reduction Non-recurring impacts starting to decrease % Planting 34% 63% 73% 67% 68% 75% 72% 84% 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) 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 billion) OPEX: BRL 1.0 billion (USD 0.3 billion) (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) 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

56 Benefiting From China s Growth ( 000s t) 4,853 4,160 BHKP Total China s Hardwood Imports of BHKP by Country (1) 2,679 2,274 Latin America (1) 5M16 5M17 1, Latin America is the leading exporter of BHKP to China, accounting to approximately 55% of China's total imports in 5M 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 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 May/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) 24,9 15,9 15,3 N. West America Europe 11,2 Japan Oceania 6,0 6,2 5,6 East Europe 0,6 LatAm China Africa 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 (Jun/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 mai-17 jun-17 BHKP prices - CIF China (US$/ton) Shipments (000 ton) Benefiting From China s Growth Source: PPPC Global 100 may 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 Carteira ZCC ¹ (1) Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Strike Put Strike Call FWD 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Notional (US$ million) Strike put avg Strike call avg FWD Notional Total US$ 2,606 MM (1) As of Aug 1,

65 65 Hedge Hedging Strategy Governance Debt Hedge: Maturity aligned with original debt (until 2023) No margin call No threshold Swap operations (currency and rate) Operating Hedge: Net FX exposure protection in US$ up to Dec/18 No leverage No margin call No threshold Current strategy: Hedging Policy approved by the Board of Directors and available at the Investor Relations website. Periodical follow up of the hedge portfolio by the Finance Committee. Maximum % of exposed operational cash flow is defined according to the FX risk management policy. Governance, Risk and Compliance (GRC) Department: Independent report to CEO and to the Statutory Auditing Committee Responsible for monitoring policies compliance Independent from Treasury Department Zero Cost Collar (protecting a minimum EBITDA margin) All Fibria operations are registered at CETIP

66 66 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)

67 EVOLUTION OF CURRENCIES FX devaluation is expected 115% 110% 105% 100% 95% 90% 85% 80% 75% 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 67 67

68 Free cash flow (1) Positive quarterly FCF in the last 5 years, even during appreciated FX USD million Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 EBITDA Margin 30% 37% 37% 41% 39% 39% 41% 42% 41% 35% 35% 45% 50% 50% 56% 54% 52% 43% 43% 36% 37% 45% Average FX (1) Excluding H2 Project, dividends, pulp logistics and land purchase effects. 68

69 (1) Considering FX (2) Considering average FX for the period 69 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$ 27 million (tax) - Remaining Balance Jun/17: US$ billion (base) 2018 (-)(c) Forestry Capex in MS state (net) (+/-)(d) Exchange variation (cash) 2017 tax deduction related to depletion: US$ 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 Jun/17: US$ 432 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 Jun/2017: - PIS/COFINS: US$ 233 million - Withholding tax (IR and CSLL): US$ 342 million - Reintegra: US$ 42 million Income Tax (h) tax credits (i) Undefined TAX PAYMENT 2 (cash basis) Q17 US$ 9 million US$ 2 million US$ 8 million US$ 14 million US$ 12 million US$ 23 million US$ 36 million US$ 6 million

70 70 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)