Goldman Sachs Natural Resources Trip. January, 2011

Transcription

1 Goldman Sachs Natural Resources Trip 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 forwardlooking statements, which speak only for the date on which they are made. 2

3 Agenda 1 The Company 2 Market Positioning 3 Pulp and Paper Market 4 3Q10 Financials 5 Synergies 6 Sustainability 7 Fibria's 1st Year 8 Corporate Restructuring 3

4 The Company 4

5 VCP and Aracruz merged to create Fibria Shareholder Structure Votorantim Industrial S.A. BNDESPar Free Float 29.34% 30.42% (1) 40.24% (2) BOVESPA "FIBR3" 60% NYSE "FBR" 40% 50.0% 50.0% 51.0% Veracel Conpacel Portocel (1) Position as of December 31, BNDESPar has 21% linked to a Shareholder s Agreement with Votorantim Industrial S.A. during the first 3 years and 10.9% during the following 2 years. (2) Free Float 40.17% + Treasury 0.07% 5

6 Improved Corporate Governance Improved Corporate Governance Board and Committees Migration to BMF & Bovespa's Novo Mercado listing segment Best IR program in the sector in Latin America by Institutional Investor Magazine 2010 Listed in the most important sustainability indexes: DJSI / ISE Fiscal Council Shareholders Committee Board of Directors (1) 9 Members: 20% Independent Chairman: José Luciano Penido CEO: Carlos Aguiar 100% Independent Board Advisory Committees (1) Policies approved by the Board: - Corporate Governance - Information Disclosure - Stocks Trading Adoption of international accounting practices (IFRS) Executive Officers Audit and Risks Personnel and Remuneration Finance Sustainability (1) Members performance assessed by independent consulting firm 6

7 Market Positioning 7 7

8 A Winning Player Superior Asset Combination Competitive Strengths Pulp Mill Paper Mill Port Terminal Leadership in Market Pulp Scale and Integrated Operations Belmonte Veracel Caravelas Modern Industrial Plants Low Production Cost DNA Três Lagoas Portocel Conpacel Piracicaba Jacareí Santos Aracruz Forest to Port Integration Through Efficient Logistics Strong / Reliable Customer Base Pulp production capacity: 5.4 million t/year Paper production capacity: 358 thousand t/year Total area: 1.0 million ha (1) / Eucalyptus plantation: 585 thousand ha (1) Unique Forestry Management: Advanced Forestry Techniques and Short Harvest Cycle 4 pulp plants, 2 paper plants and operation of 3 port terminals High yield in eucalyptus production (avg 45 m 3 /ha/year) and certified forests Short harvest cycle: 6 years vs years in Scandinavia (1) Data as of September 30, Does not include partnership program which represents 124 thousand ha. 8

9 Leadership in the Global Market Pulp Sector Industry Outlook (1) Pulp Production Capacity (2) Paper & Board 394 million t 2009 ('000 t) Recycled Fiber 206 million t 52% 48% Pulp 188 million t 1st Fibria Arauco APRIL CMPC 5,400 ~ Twice the size Mechanical 35 million t 19% 81% Chemical 153 million t Sodra Botnia Tembec Suzano Integrated Mills 103 million t 67% 33% Market Pulp 50 million t Weyerhaeuser APP Canfor Domtar Softwood/Other 24 million t 48% 52% Acacia/Other 10 million t Hardwood 26 million t 38% 62% Eucalyptus 16 million t IP Ilim Georgia Pacific ENCE Mercer West Fraser Cenibra Bleached Hardwood Kraft Pulp (BHKP) Bleached Softwood Kraft Pulp (BSKP) Unbleached Kraft Pulp (UKP) Mechanical Stora Enso 66% Other Eucalyptus Pulp producers: 11 million t 34% (1) Market Share estimated considering 2010 estimated demand. (2) PÖYRY 9

10 Relevant Market Share and Low Operations Cost DNA Fibria's Market Share (1) Average Cash Cost of BHKP (2) (US$/t) 3% Total Pulp: 188 million t 11% Total Market Pulp: 48.5 million t Wood Others Iberia 22% Hardwood Cash Cost (US$/t) vs Capacity ('000 t) 32% milliont Total Hardwood Pulp: 25 million t Total Eucalyptus Pulp: 17 million t Cash cost (US$/t) Bleached hardwood kraft (1) Market Share estimated considering 2009 nominal capacity (2) Source: Hawkins Wright Estimate 2Q10 (3) Fibria 3Q10 Cash cost without downtimes Capacity ('000s t) 10

11 Long Term Relationship With Key Clients Global Footprint Customized pulp products to specific paper grades Sole supplier to key customers focused on eucalyptus pulp to the tissue market Uses of Fibria s Pulp 3Q10 The top 10 customers represent, on average, 65% of sales Specialty Over 20 years of relationshipwith many of the main clients 18% Tissue Global contracts P&W 25% 57% Europe 41% Switzerland North America 27% Hungary Asia 20% Beijing Miami Hong Kong Sales Destination (1) Brazil 12% Headquarters Subsidiaries Representative offices (1) Sales destination as of 3Q10. NY004GAK_1.wor 11

12 Unique Brownfield Potential Growth Modern Plants Planned Capacity Increase Aracruz Capacity: Technical age: 9 Best sites for additional capacity ('000 t) Average Plant Capacity ( 000 t) Três Lagoas II Três Lagoas Capacity: Technical age : 0 Capacity: 1.5 million t Forest base need: 150 thousand ha - TLS I surplus: 30 thousand ha Social-environmental licensing process initiated Startup expected for 2014 Veracel II Capacity: 1.5 million t Negotiations with partner in progress Russia USA Japan Indonesia Brazil Portugal Chile Canada Finland South Sweden France Spain Africa China Uruguay Jacareí Capacity: Technical age : 5 5,400 1,500 Três Lagoas II 750 (1) Veracel II 1,500 Losango 1,500 Aracruz IV 10, Technical age of equipment (years) Veracel (1) Capacity: 550 Technical age : 3 Fibria 2010 Brownfield Brownfield Greenfield Brownfield Fibria 2025 Fibria's Pulp Capacity CAGR: 3.6% Expansion (1) Fibria s 50% stake at Veracel Source: Fibria 12

13 Forest Competitiveness Fibria : Forest Competitiveness Genetic and Technological Development at Fibria years years 8 6 years 7-8 years 7-15 years years years Brazil (eucalyptus) Indonesia S.Africa Chile Portugal / Spain USA / Canada Finland / Sweden 70's 80's 90's 00's Next decade (expected) Harvesting Cycle (avg. years) Yield (m3/ha/year) Air Dry Ton / ha / year Source: ABRAF, STCP, Poyry and Fibria. Note: Pulp trees differ depending on the country: Indonesia acacia, S.Africa tropical and temperate eucalyptus, Chile temperate eucalyptus, Portugal/Spain temperate eucalyptus, USA/Canada aspen, Finland/Sweden betula. 13

14 Applied Technological Innovation Enhanced Forestry Techniques new clone current clone 20 months growth 14

15 Pulp and Paper Market 15

16 Shipments to Capacity Ratios and Inventories World chemical market pulp shipments to capacity World P&W paper shipments to capacity 102% 91% 91% 88% 91% 86% 82% 82% 79% 97% 95% 95% 92% 92% 93% 88% 86% 77% 98% 89% 96% 96% 95% 89% 88% 88% 88% 88% 90% 92% 92% 85% 86% 90% 89% 83% 88% 84% 87% 87% 86% 82% 83% 79% 79% 80% 80% 81% 82% 78% 76% 90% 87% 85% Sep-10 Oct-10 Nov-10 Aug-08 Sep Nov-08 Dec-08 Jan-09 Feb-09 Mar May-09 Jun Aug-09 Sep Nov-09 Dec-09 Jan-10 Feb-10 Mar May-10 Jun Aug-10 Oct- Apr- Jul- Oct- Apr- Jul- Sep- Oct- Nov- Dec Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Source: PPPC World 20 Total Chemical Market Pulp Source: PPPC Global 100 World Printing & Writing Report World pulp producers' average days of supply World pulp consumers' days of supply Dec-05 Fev-06 Apr-06 Jun-06 Aug-06 Out-06 Dec-06 Fev-07 Apr-07 Jun-07 Aug-07 Oct-07 Dec-07 Feb-08 Apr-08 Jun-08 Aug-08 Oct-08 Dec-08 Fev-09 Apr-09 Jun-09 Aug-09 Oct-09 Dec-09 Fev-10 Abr-10 Jun-10 Aug-10 Oct-10 Dec-10 days days Dec-10 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun Source: PPPC World 20 Source: Utipulp

17 Industry Outlook Market pulp: world demand growth (%) China: Eucalyptus pulp shipments ('000 t) 0% 6% 8% 11% 8% Average (1) 132 ktons Average 305 ktons Average 193 ktons % Total North America Europe Latin America Japan China Nov-10 Dec-10 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Out-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct x 2009 Source: PPPC World 20 Chemical Market Pulp Source: PPPC World 20 (1) Average does not consider December 2008 data European List Price (BHKP) x Commodity Index (CRB) Announced list pulp price List price (as of December/2010): North America: US$900/t Europe: US$850/t Asia: US$750/t European List Price (US$/t) BHKP US$840/t US$920/t Jan-08 Feb-08 Apr-08 May-08 Jul-08 Sep-08 Oct-08 Dec-08 Jan-09 Mar-09 May-09 Jun-09 Aug-09 Sep-09 Nov-09 Jan-10 Feb-10 Apr-10 Jun-10 Jul-10 Oct-10 Dec-10 Commodity Price Index (CRB) CRB BHKP List Price 17 Source: CRB (Commodity Research Bureau) Bloomberg BHKP: FOEX Source: Fibria

18 Pulp Supply x Demand Balance Expected to Remain Tight Expected Supply x Demand Balance (1) Market Pulp BHKP (million t) Europe 5% p.a. 0.2 USA 2% p.a. 0.3 Others 2% p.a Rizhao (3Q10/2011) 0.6 Três Lagoas (2010) 0.3 Eldorado (4Q12) -0.1 Others (2) 28.0 Asia 4.5% p.a MT +2.1 MT Demand Supply 2009 BHKP 2009 Demand BHKP Demand 2012 BHKP Asia Europe USA Others 2012 BHKP Demand Demand 2012 BHKP 2009 BHKP Supply Demand 2009 BHKP Asia Europe USA Others 2012 Supply Demand OR (3) 94% OR (3) 89% (1) Source: PPPC / Fibria (2) Capacity changes (3) OR: Operating rate 18

19 P&W Capacity Changes P&W paper capacity withdrawals (1) China: P&W paper capacity changes (1) Company / Mill Effective Date '000 t Company Region/Date '000 t Yeuyang Paper M Real Europe/ Fujian Nanping March International Paper Europe/ Sun Paper/IP March Others Europe/ International Paper North America/ Others North America/ Stora Enso Europe/ Sappi Europe/ Others Europe/ Domtar North America/ = 1.5 million t 2010 = 1.5 million t Guangxi Yongkai Sugar April APP, Hainan Island May ,200 Lee&Man 1H Shandong Huatai late Guangxi Jindaxing December Others ,350 Guangxi Yongkai Sugar China Metalurgical Meili Paper Q = 4.0 million t International Paper North America/ Shandong Huatai Paper Q Others North America/ Total P&W capacity withdrawals in Europe and North America 3,000 Shandong Chenming Q ,250 Guangxi Huajin Group late Sun Paper Q = 5.6 million t Nine Dragons late Others ,170 Guangxi Tianyi Paper Mar Double A Q Tan Mai Paper = 1.1 million t April early Total P&W capacity changes in China 10,700 (1) Source: TerraChoice Monthly Report October

20 China s Presence in the Market Pulp Sector China's Hardwood imports of BHKP by country (1) China's share of market pulp (%) (2) Pulp Shipments ( 000) and Market Share (%) % Growth Eucaplyptus Hardwood Total 21% 000 t BHKP Total +107% Brazil +2% Indonesia +51% Chile +12% +117% +38% +151% +142% +2% Russia Uruguay Canada USA Others Thailand 000 t % 12% 22% 10% 26% 10% 12% 10% 16% 7% 9% 9% 11% 13% Brazil is the leading exporter of BHKP to China, accounting to approximately 41% of China's total imports in Between 2005 and 2009, the Chinese market share of eucalyptus shipments increased by 17 p.p. (total market pulp: +11 p.p.) (1) Source: Hawkins Wright (2) Source: PPPC W20. Coverage for chemical market pulp is 80% of world capacity. 20

21 Benefiting From China s Growth China Paper&Board Production and Consumption (1) Per Capita Consumption of Tissue by World Region (2) in million tons kg/person/yr Kg / capita Consumption Production Per Capita 0 0 North America West Europe Japan Oceania LatAm East Europe China Africa Chinese consumption of high quality tissue paper has a huge potential upside, as GDP per capita increases. (1) Source: China Paper Association. (2) Source: RISI 21

22 3Q10 Financials 22

23 3Q10 Performance Key figures Pulp sales mix 3Q10 2Q10 3Q09 3Q10 vs 2Q10 3Q10 vs 3Q09 Pulp Production ( 000 t) 1,334 1,208 1,428 10% -7% 3Q09 2Q10 3Q10 Pulp Sales ( 000 t) 1,195 1,253 1,276-5% -6% Paper Production ( 000 t) % Paper Sales ( 000 t) % -5% 37% 11% 30% 24% 11% 38% 20% 12% 41% Net Revenue (R$ million) 1,797 1,809 1,402-1% 28% Adjusted EBITDA (R$ million) % 68% 22% 27% 27% EBITDA Margin (%) 40% 40% 30% - 10 p.p. Financial Income (R$ million) 249 (315) % Net Income (R$ million) % -18% Europe North America Asia Brazil/Others Cash cost (R$/t) EBITDA (R$ million) and EBITDA Margin (%) % 40% % Source: Fibria 1Q10 2Q10 2Q10 w/ 3Q10 downtimes 3Q10 w/ downtimes 3Q09 2Q10 3Q10 23

24 Debt Debt indicators (R$ million) 3Q10 2Q10 3Q09 3Q10 vs 2QT10 3Q10 vs 3Q09 Gross Debt 12,296 13,209 15,406-7% -20% Cash (1) 2,184 2,364 2,594-8% -16% Net Debt 10,112 10,846 12,812-7% -21% Average maturity (2) (months) Q09 2Q10 3Q10 Net Debt / EBITDA (3) (x) 7,2 4,7 3,9 Sep 09 Jun 10 Sep 10 (1) Includes derivatives at fair value (R$60 million) (2) Does not include debt with former Aracruz shareholders (3) LTM EBITDA Debt amortization schedule (R$ billion) Debt by currency and type Short-term debt: from 30% in Sept/09 to 19% in Sept Gross debt by currency 26% 74% Gross debt by type 5% 6% 14% 36% 11% 28% (4) Amortization schedule as of Sep/2009 (5) Amortization schedule as of Sep/2010 (4) (5) Sep 09 Sep 10 Local Foreign Pre-payment Former Aracruz shareholders NCE Bonds BNDES Others 24

25 Liquidity Event Conpacel Sale The Deal Rational The amount: R$1.5 billion for Conpacel + KSR Conpacel: pulp and paper plant with annual production capacity around 390,000 tons of paper and approximately 650,000 tons of pulp and land with an approximate owned area of 76,000 hectares (71,000 hectares of plantation - 53,000 hectares of owned areas and 18,000 hectares of leased areas); The Proposal also contemplates the acquisition of the installations and other assets of the KSR paper distribution operation; Focus on the pulp business Support for growth plans Contributes for liability management plan Proposal in line with company s expectation The closing of the acquisition of the Conpacel Assets shall occur until January 31, 2011 and until February 28, 2011 for KSR Assets. 25

26 Historical Ratings S&P Moody s Aracruz VCP ( ) / Fibria ( ) Aracruz VCP ( ) / Fibria ( ) 2005 BBB- N.A Baa3 N.A BBB- N.A Baa3 N.A BBB- BBB 2007 Baa2 Baa BBB BBB 2008 Baa2 Baa BB BB 2009 Ba2 Ba N.A. BB 2010 N.A. Ba1 Last Report Date: December 2010 / Rating: BB / Outlook: Positive Last Report Date: December 2010 / Rating: Ba1 / Outlook: Positive 26

27 Synergies 27

28 Synergies Net Present Value of Synergies (R$ billion) Other Supply chain 2% 21% Taxes 11% 16% SG&A Industrial 27% 23% Forest 9M10 status: 117% of the projected curve for Dec/09 9M10 Dec/ Estimated Actual 28

29 Sustainability 29

30 Sustainability Fibria was chosen for the most important sustainability indexes: Dow Jones Sustainability Index (DJSI) and Bovespa Corporate Sustainability Index (ISE) The Company is committed to control and report its Carbon and Water Footprint when servicing each customer Fibria has defined 5 sustainability goals: Improve its relationship with Communities Social Outreach of the Forest Partnership Programs Recover the Biodiversity in Natural Reserves Strengthen the Relationship with Civil Society Obtain the Certification of all Forest Areas 30

31 Fibria s 1 st Year 31

32 Fibria's 1st Year Operating Excellence - Achievement of Três Lagoas Unit learning curve - EBITDA margin increased to 40% - One of the lowest cash costs in the industry: US$249/t - Synergies: R$2.4 billion (NPV) captured - Personnel, system and process integration Financial Turnaround - Liquidity event: Guaíba Unit sale - Access to capital markets - Early settlement of derivatives debt - Reduced leverage - Extended debt maturities Corporate Governance - Migration to Novo Mercado segment - Corporate Governance, Information Disclosure and Securities Trading policies approved by the Board - Adoption of international accounting practices (IFRS) - Included in the DJSI and ISI sustainability indexes - Best IR program in the sector in Latin America by Institutional Investor Magazine 2010 Expansion - Três Lagoas II: start up slated for Veracel II: Negotiations with partner in progress 32

33 Corporate Restructuring 33

34 Corporate Restructuring Event Date Acquisition by VCP of additional 28% of Aracruz common shares Jan 20, 2009 VCP Capital Increase Apr 14, 2009 VCP conversion of prefered into common shares Jun 12, 2009 Tender Offer for Aracruz common shareholders Jul 02, 2009 Incorporation proposal for the ratio Aug 24, 2009 Merger of Aracruz shares into VCP approval Aug 24, 2009 Shareholderes Agreement - VID and BNDES Oct 29, 2009 End of withdrawal rights period Nov 12, 2009 End of Aracruz trading Nov 17, 2009 Fibria trading start (Bovespa: FIBR3 / NYSE: FBR) Nov 18, 2009 Approval of the merger of Aracruz into Fibria Dec 22, 2009 Migration to Novo Mercado listing segment at BM&FBovespa May 20,

35 Investor Relations Team: Website: Tel.: +55 (11)