UBS LatAm Fixed Income Trip. February, 2017

Transcription

1 UBS LatAm Fixed Income Trip February, 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 Agenda 3

4 Company Overview 4

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 Remuneratio n 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 (1) Controlling group (2) Free Float 41.44% + Treasury 0.06% 5

6 A Winning Player Superior Asset Combination Main Figures 2016 Pulp capacity (1) million tons Net revenues US$ billion Total Forest Base (2) thousand hectares 969 Belmonte Veracel Caravelas Portocel Aracruz Planted area (2) thousand hectares 568 Net Debt US$ billion Net Debt/EBITDA (in Dollars) (3) X 3.30 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 Fibria s Units Industrial Capacity Horizonte 2 Mato Grosso do Sul 1,950 thousand t/year * Veracel is a joint venture between Fibria (50%) and Stora Enso (50%) and the total capacity is 1,120 thousand ton/year 7

8 8 Fibria s Commercial Strategy Sales Mix by Region and by End Use - Fibria Highlights Region 2016 End Use 2016 Europe 36% N. America 22% LatAm 10% Asia 32% Net Revenues by Region - Fibria 9% 10% 9% 10% 24% 25% 24% 28% 24% 24% Tissue Printing & Writing 48% 34% Specialties 18% 32% 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 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% Europe North America Asia LatAm

9 Leadership Position Industry Outlook (1) Fiber Consumption 412 million t Recycled Fiber 242 million t 59% 41% Pulp 169 million t 18% 82% Mechanical 30 million t Chemical 140 million t 59% Integrated Mills 83 million t 41% Market Pulp 57 million t 46% 54% Softwood/Other 26 million t Hardwood 31 million t 30% 70% Acacia/Other 9 million t Eucalyptus 21 million t 75% Other Eucalyptus Pulp producers: 16 million t 25% (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) T16 3T16 2T 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 **Source: Fibria s estimates **Source: Total year Fibria estimates and PPPC G100 BEKP demand growth Jan-Nov What happened in 2016? Compared to our Forecast BHKP CAPACITY CHANGES FIBRIA S EXPECTED SCENARIO FOR 2016 YEAR-TO-DATE SCENARIO IN 2016 CMPC Guaiba II 800 CMPC Guaiba II 800 Klabin 660 Klabin 600 Altri Celbi 30 Altri Celbi 30 Old Town (Expera) -40 Ence Navia 20 Woodland -90 Old Town (Expera) -40 Verso Wickliffe -55 Woodland -90 APRIL Kerinci -120 APRIL Kerinci -100 Unexpected Closures, Conversions and Downtime -200 Unexpected Closures, Conversions and Downtime -350 China, Uruguay, Chile, Spain and Brazil Net 985 Net 870 BEKP demand growth** 1,500 BEKP demand growth** 1,119 1,300

13 Actually has been even more balanced than previous 2 years! ,770 1,305 1,619 1,450 1,088 1,300 Eucalyptus Demand Growth (Kt) Hardwood Net Capacity Increase (Kt) Ratio: Demand Growth / Net Capacity Increase Source: PPPC - Global 100 (historical demand), Outlook for Eucalyptus Market Pulp Oct 2016 and Fibria s estimates 13

14 Yet Prices performance has been much worse than forecasted! BHKP DELIVERED TO EUROPE (USD/T) Q16 2Q16 3Q16 4Q16 Annual 2016 Consultants' average end 2015 for 2016 Realized PIX/FOEX Consultants: Hawkins Wright, RISI and Brian McClay (published in the end 2015 for 2016 prices) 14

15 In our view, there is one major reason for this lousy market price scenario: 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 % 6.2% 3.7% -3.5% Global NA WE China % 20,2% -4.4% -2.6% Global NA WE China Source: PPPC Global

16 SO WHAT CAN WE EXPECT IN 2017? SAME AS 2016? BHKP CAPACITY CHANGES FIBRIA EXPECTED SCENARIO FOR 2017 IN THE END 2016 SCENARIO IN 2017 Klabin APP OKI 1,000 1,770 Fibria TLS II Metsa APRIL Kerinci ,305 1,619 1,450 1,088 1,300 1,350 APRIL Rizhao Taiwan P&P Resolute Calhoun Eucalyptus Demand Growth (Kt) Navigator Cacia Unexpected Closures, Conversions and Downtime Hardwood Net Capacity Increase (Kt) 30 Net BEKP demand growth** 770 1,350 Ratio: Demand Growth / Net Capacity Increase ** Fibria s estimates Source: PPPC - Global 100 (historical demand), Outlook for Eucalyptus Market Pulp Oct 2016 and Fibria s estimates 16

17 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... U$/Euro parity!? U$ 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 17

18 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 Global Market BEKP Demand Shipments of Hardwood and Eucalyptus Pulp 2016 vs (1) CAGR BEKP (3) Total 8% 4% 1,655 kt 1,247 kt -5% 2% -3% -3% kt 42 kt kt kt North Western America Europe (1) Source: PPPC Global 100 December/ % 1,543 kt 1,350 kt China 24% BHKP 4% 6% 325 kt 303 kt Others BEKP 16% 2,763 kt Total 8% 145 kt North America (3) Source: PPPC Global 100 December/2016 7% 467 kt Western Europe 40% 1,700 kt China 10% 451 kt Others Operating Rate (shipments to capacity) - Hardwood (2) 105% 100% 100% 95% 90% 85% 80% 75% Min. 70% Days of Supply - Hardwood (2) 36 (2) Source: PPPC Global 100 December/

19 Technical Age and Scale in the Pulp Industry Further closures are expected due to lack of adequate investments in the industry 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. Source: Poyry 19

20 Capacity closures DO happen Closures of Hardwood Market Pulp Capacity Worldwide (000 ton) ,260-1,180-1,085 Potential Additional Conversions (1) Closures do not include temporary movements. Unexpected downtimes/closure in 2016 totaled 350kt (not included in the chart above). Source: PPPC. RISI and Public information as of November, 1 st (1) Realized closures: as of September : -90kt Woodland (USA), -100kt April Kerinci (Indonesia), -40kt Old Town (Expera) 2017: Resolute Calhoun: -40kt, -400kt April Kerinci and Rizhao (Indonesia), - 80kt Taiwan P&P, -60kt Navigator Cacia 2017/2018: -275kt Arauco Valdivia (Chile) 20

21 Competitive Cash Production Cost BHKP capacity ( 000 t) 1,130 1,105 2,075 2,290 4,915 3,420 15,275 TOTAL: 30, WC=($29/t) BHKP (USD/t) Interest Capex Income tax SG&A USA China Canada Iberia Chile/Uruguay Indonesia Brazil Fibria 2016 Estimated Fibria w/ H2 - Cash Cost (US$/t) Delivery CIF Europe 2021 Source: Hawkins Wright (Production Costs December 2016) and Fibria s 4Q16 Earnings Release-FX considered by the consultant at BRL/USD = Fibria with Horizonte 2 (H2) cash cost was estimated according to weighted average cost, after mill balance, converted at BRL/USD=3.19. Includes energy sales. 21

22 Pulp prices - CIF Europe (US$/ton) Capacity Additions (000 ton) 22 Gross capacity addition should not be counted as the only factor influencing pulp price volatility. (1) 1200 Spread Europe 31 st, 2017: US$151/t (3) 2, Horizonte Valdivia APP Hainan Mucuri VeracelNueva Aldea Santa Fé Fray Bentos Kerinci PL3 Rizhao Três Lagoas APP Guangxi Chenming Zhanjiang Eldorado Maranhão Montes del Plata Oji Nantong Guaíba II Klabin APP South Sumatra (2) 1,5 1 0, BHKP BSKP (1) Source: Hawkins Wright, Poyry and Fibria Analysis. Pulp price estimates according to Hawkins Wright (Apr/16), Brian McClay (Jun/16) and RISI (Apr/16) (2) Partially integrated production. (3) Source: Bloomberg

23 Dec-99 Mar-00 Jun-00 Sep-00 Dec-00 Mar-01 Jun-01 Sep-01 Dec-01 Mar-02 Jun-02 Sep-02 Dec-02 Mar-03 Jun-03 Sep-03 Dec-03 Mar-04 Jun-04 Sep-04 Dec-04 Mar-05 Jun-05 Sep-05 Dec-05 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-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 Jul-14 Oct-14 Jan-15 Apr-15 Jul-15 Oct-15 Jan-16 Apr-16 Jul-16 Oct-16 Jan-17 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 Source: Bloomberg January 31 st, 2017

24 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 Lowest volatility among commodities = 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. Source: Bloomberg January 31 st, Since January 1, 2009 up to January 31 st,

25 Financial and Operational Highlights 25

26 Each 5% depreciation of the Real increases EBITDA by around R$420m and FCF by R$550m Exchange Rate Average (R$/US$) (1) Fibria net pulp price (US$/t) 456,0 670,0 639,0 581,0 610,0 572, (2) Fibria net pulp price (R$/t) 912 1,179 1,067 1,133 1,311 1,344 1,951 1,731 1,666 EBITDA Margin 29% 815,0 40% 1,488 34% 36% 1,173 1,153 40% 39% 1,295 1,185 53% 1,560 43% 1,073 EBITDA (US$ million) (e) (1) According to Focus Report (Brazilian Central Bank January 31 th, 2017) I (2) 2017 market consensus 26

27 Cash Production Cost (R$/t) 4Q16 External factors (12) (10) 727 4Q15 Higher maintenance downtimes impact Inflation FX Lower energy price Wood Total Management gains 4Q16 Cash Production Cost Ex-downtimes (R$/t) Cash Production Cost (R$/t) % Q15 3Q16 4Q With downtimes Without downtimes 27

28 (1) Excludes Conpacel 28 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) 2009(2) 2010(2) Wood Energy price Input consumption

29 Net Results (US$ million) (118) 1, (569) deferred current (396) 477 (202) Adjusted EBITDA FX Debt MtM hedge Net interest Deprec., amortiz. and depletion Income Taxes Others (1) Net income Non-recurring effects (1) Includes other Exchange rate/monetary variations, other financial income/expense and other operating income/expenses Minimum proposed dividend of R$393 million (2) (2) Equivalent to minimum annual dividend of 25% of net income, adjusted by the changes in reserves 29

30 (1) Does not consider Horizonte 2 Project and pulp logistics projects. (2) Includes other financial results. 30 Free Cash Flow (1) (US$ million) 244 4Q16 (187) H2 funding interest Klabin effect 109 (58) (5) 104 Adjusted EBITDA 4T16 Capex (ex-h2 and logistics projects) Net interest Working Capital Income Taxes FCF 4T (583) (126) (30) ( 8 ) Adjusted EBITDA 2016 Capex (ex-h2 and logistics projects) Net interest Working Capital Income Taxes Others FCF 2016

31 31 ROE and ROIC (R$) ROE = Adjusted EBIT (1) / Equity before IAS 41 (2) ROIC = Adjusted EBIT (3) / Invested Capital before IAS 41 (2) 25.1% 22.8% 3.4% 5.7% 6.2% 8.9% 6.9% 9.2% 8.0% 9.0% Average FX (R$/US$) Average Net Pulp Price (US$) 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

32 Indebtdeness Gross Debt and Cash Position (million) Net Debt (Million) and Leverage 12,744 Gross debt 16,153 H2 Cash position 4,717 Net debt/ebitda (R$) Net debt/ebitda (US$) ,015 10, ,435 3,264 CRA (2) 4,956 1, ,447 2,821 3,272 3,509 Dec/15 R$ US$ Dec/16 Dec/15 R$ US$ Dec/16 Dec/15 Sep/16 Dec/16 R$ US$ Interest Expense/Income (US$ million) and Cost of Debt in US$ (1) Cost Average of cost debt in US$ (% p.a.) Interest Expense (Gross) Interest on Financial Investments (1) Considering the portion 3.4 of debt in 3.3 reais (1) fully adjusted by the market swap curves at the end of each period (2) Total weighted average cost of 97.8% of the CDI 32

33 Robust Liquidity USD million 31, 2016) (1) Capex to be executed on Horizonte 2 Project (2) Related to the agreement with Klabin 33 Revolver 2, Bond 2027 on Jan 11 th, 2017: US$700 million coupon of 5.5% p.a. Pré-pagto. NCE Voto IV Finnvera BNDES ACC/ACE Bonds CRA e Outros Cash on hand (1) 1, Liquidity Capex H2 (2) : (1) Not including US$18 million related to MtM of hedging transactions. (2) Financial execution of US$1,248 million capex until December, Horizonte 2 Funding (US$ billion) Q Q , , , , , Excess of US$0.2 bn Horizonte 2 Project US$2.2 bn Export Prepayment CRA BNDES FDCO ECA Working capital release (2) Funds withdrawn until Dec 31, Contracted funds to be withdraw Total

34 34 Initiatives for Leverage Management Initiatives expected to be implemented in the short term Initiatives under analysis Amount Net Debt/EBITDA reduction Amount Net Debt/EBITDA reduction (USD million) (x) (USD million) (x) Working Capital Release x Accounts receivable (customers) x Accounts payable (suppliers) x Accounts payable (suppliers) x Others x Total x Capex x Forestry x Capex H x Total x Total: USD 721 million (0.68x)

35 Waiver on 4.5x Covenant was Fully Negotiated Horizonte 2 start up in 4Q17 boosts EBITDA and FCF generation (1) As stated on the Liquidity and Indebtedness Policy and Shareholders Agreement 35 NET DEBT/EBITDA (USD) Actual (in US$) Covenant level 2.64 Waiver Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q x 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

36 Capital Structure: Fibria has achieved the lowest leverage ratio among its Latin American peers Net Debt/EBITDA (x) (1) Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 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/Negative Baa3/Stable Baa3/Stable - Ba2/Stable Fitch BBB-/Stable BBB/Stable BBB+/Stable BBB-/Negative BB+/Positive (1) Fibria s historical data in BRL. 36

37 (1) G-spread on January 27 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 ,8 444 VALE BRAZIL EMBRAER FIBRIA BRFOODS RAÍZEN GLOPAR BRASKEM SUZANO KLABIN GERDAU PETROBRAS ELDORADO BRAZIL EMBRAER RAÍZEN FIBRIA PETROBRAS

38 2017 OUTLOOK CAPEX AND CASH COST 38

39 39 Fibria CAPEX 2017 BRL million 3,011 5,213 2, USD1,533 mn (1) USD630 mn (1) 2017 CAPEX Maintenance Guidance (including modernization) Logistics Projects H CAPEX Total Guidance (1) Converted at 2017 average FX - BRL/USD 3.40, according to Focus Report (Brazilian Central Bank Jan 31th, 2017)

40 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) (1) Converted at 3Q16 LTM FX at BRL/USD

41 Expansion Project Horizonte 2 41

42 42 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

43 Fibria s nominal capacity ESTIMATED MARKET BHKP CAPACITY RANKING 2017 (000T) 6,500 7,940 8,050 8,150 8,150 8,150 1,740 1,850 1,950 1,950 1, ,300 5,300 5,300 5,300 5,300 5, 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 Horizonte 2 ('000 t)(1) Klabin's Puma Project ('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. 43

44 44 Pulp sales destination: Fibria growing where the market grows 37% 36% 19% 22% 36% 32% 8% 10% Total sales volume distribution after H2 start up (2) Current net revenue distribution (1) (1) Considers 4Q16 last twelve months. (2) Includes Klabin s sales volume

45 Horizonte 2 Project Site Overview (1) Expansion Capex of USD2,254 M (USD1,156/t) Start-up beginning of 4Q17 Energy Surplus 130 MWh 77% overall completed 57% of financial execution - cash disbursement (BRL 3.2 billion) Day 45

46 Horizonte 2 Forestry Base Forestry base secured as planned 46 Already planted since project approval 125,000 ha To be planted Total Wood purchased 62,000 ha 187,000 ha 5.0 million m 3 7,000 ha to be planted in ,000 ha to be planted in 2017 and 2018 Average distance from forest to mill H1 + H2 up to 100 km

47 47 Logistics Mato Grosso Mato Grosso do Sul Goiás Brasilia Port Terminal 32

48 Capex Flexibility in the Timetable, without changing the startup date (1) FX = 3.65 BRL/USD on previous forecast. FX = 3.40 BRL/USD on current forecast. (2) Average FX according to capex execution. 48 TOTAL CAPEX (BRL BILLION) - BRL 1,216 mn CAPEX EXECUTION TIMETABLE (BRL MILLION) 50% 39% % 292 4,026 3,011 8% 200 Nov Forecast Current Forecast USD bn (1) USD bn (1) USD 80 mn USD 1,168 mn USD 886 mn USD 61 mn FX (2)

49 49 Historical Horizonte 2 Project Capex (USD billion) 8.7 To be disbursed Executed BRL/ USD 3.39 BRL/ USD 3.46 November, 2015 Savings, Contingencies and indirect costs FX Inflation Others December, 2016 USD 2,214 USD 2,213 BRL/USD 3.95 BRL/USD 3.40

50 Funding Cost and maturity 4T16 H2 4T16 + H2 4T16 + H2 + Bond Average Cost (US$ p.a) (1) 3,6% 2,9% 3,5% 3,7% Average Maturity (years) 4,3 6,2 4,5 5,1 Amortization Schedule (2) 4Q16 Proforma with TLS II + Bond 2027 (700 MM) US$ million 2,688 Revolver 541 Cash on hand 2, , Caixa BNDES Bond EPP ECN ACC/ACE CRA BNB Finnvera Finame Development Agencies (FCO, Finep & FDCO) (1) Swap Bloomberg (2) FX considering new funding for the TLS II Project:

51 51 Horizonte 2 project assumptions UNIT R$ US$ Pulp production/year k tons 1,950 1,950 Expansion capex (1) $ billion 7,492 2,254 Expansion capex (1) $/t 3,854 1,156 Sustaining capex (2) $/t Cash production cost (3) $/t Energy surplus MWh Project approval FX BRL/USD All in cash cost (estimated range) (4) $/t Net pulp price (5) $/t Free Cash Flow (estimated) $/t Payback period (estimated) years (1) Includes chemical leasing and to increase capacity to 1,950 kt/year (FX (2) Estimated sustaining capex in perpetuity (FX 3.30) (3) Estimated weighted average cost, after mill balance. Includes energy sales (FX (4) Cash cost + freight + SG&A + Sustaining Capex + Interest + taxes (FX (5) 2017 market consensus.

52 52 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

53 BACK UP 53

54 Green Bond

55 55 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

56 Productivity index / year Sustainable Forest Management Fibria sustainably manages forested areas to FSC and PEFC standards, to include: Production and acquisition of eucalyptus seedlings Preparation of soil for the plantation of seedlings including subsoiling and harrowing activity Plantation of seedlings Protection and maintenance of planted seedlings up to harvest Environmental Benefit / Impact: With management to these standards, Fibria is contributing to: Carbon sequestration; Water quality and cycle regulation; Erosion control, soil protection and nutrient cycling; Natural areas protection Neighboring areas Fibria s Forest Management Note: Fibria has long-term targets (1) to reduce by one third the amount of land required for pulp production and (2) double carbon sequestration from the atmosphere. These projects will help to contribute to this end. Source: Information previously disclosed in public Fibria reports FSC License Codes FSC-C100042, FSC-C100704, FSC-C

57 Restoration of Native Trees and Conservation of Biodiversity Fibria invests in projects to restore natural vegetation cover in degraded land, to include: Acquisition of new native Brazilian seedlings Planting native Brazilian seedlings in degraded land Creation of ecological corridors and mosaics in eucalyptus plantations so they can serve as wildlife and flora habitat conservation Studies that evaluate and monitor the conservation of HCV areas Environmental Benefit / impact: Fibria s effort to restore native forest areas has increased forest coverage and biodiversity, led to improvements in ecosystem services, including: Carbon sequestration Availability and quality of water Erosion control, soil protection and nutrient cycling Habitat provision Before (2012) Note: This category contributes to Fibria s long-term targets to (1) double carbon sequestration and (2) to promote the environmental restoration of 40 thousand hectares between 2012 and Since 2012, 13.9 thousand hectares of environmental restoration has occurred, 35% of the target. 2,402 hectares were restored in 2015 alone. The goal for 2016 will be to restore 2,603 hectares. Source: Information previously disclosed in public Fibria reports After (2016) 57

58 Waste Management Conversion of Production Plant Waste to Soil Acidity Corrective At Fibria s Jacarei and Três Lagoas mills, there is a system in place to collect byproducts of the industrial process and convert this material into a soil acidity corrective, to be used in Fibria s forest areas The process collects ash, grits, dregs and lime mud from the production process and the transformed product replaces the use of calcium carbonate Environmental Benefit & Impact: Fibria s process to transform the mill byproducts in soil acidity corrective has resulted in: ~30% reduction in waste sent to external landfills from the mill sites Note: Fibria has a long-term target to increase eco-efficiency, by reducing in 91% the quantity of industrial waste disposed in own or third-party landfills. This project will contribute to meeting the company s long term goal to reduce the amount of solid waste sent to landfill to 5kg/adt, by Source: Information previously disclosed in public Fibria reports 58

59 Water Efficiency Water Recycling and Re-use at Aracruz Mill Fibria has a range of projects at the Aracruz Mill that reduce water usage Reduce the consumption of sealing water of vacuum pumps of the dryer; Reuse water in the hydraulic units of the presses and baling units; Reuse of the cooling water of furnaces in the Water Treatment Plant currently released as effluent; Connect the cooling tower to the causticizing tower, so that water expelled from the cooling tower is then used in the causticizing tower Environmental Benefit & Impact: The various water efficiency projects are designed to achieve: 310 m3/h reduction in the water withdrawn from the total intake water to the industrial operation. This reduction is equivalent to 3.9% in industrial water intake at the mill Source: Information previously disclosed in public Fibria reports 59

60 Cost reduction initiatives and industry statistics 60

61 Third-party wood (%) THIRD-PARTY WOOD REDUCTION Non-recurring impacts starting to decrease % Planting 34% 63% 73% 67% 68% 75% 67% 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 (km) 35% 283 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 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 61

62 68 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

63 76 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

64 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: +2.5% Softwood: +0.8% 000 ton Growth Growth Hardwood % 36% Eucalyptus % 52% Softwood % 16% Source: PPPC report (Sept. 2015) Hardwood Softwood Market Pulp % 27% Source: PPPC reports. Excludes Sulphite and UKP market pulp (Sept./15) Paper Production Runnability with BHKP Source: RISI conference, August

65 Benefiting From China s Growth China s Hardwood Imports of BHKP by Country (1) ( 000s t) BHKP Total Latin America (1) 10M15 10M Latin America is the leading exporter of BHKP to China, accounting to approximately 55% of China's total imports in 10M 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% (kg/person/year) N.America W.Europe E.Europe Japan China Asia FE Middle East LatAm Africa Oceania 30% 25% 20% 15% 10% 5% 0% Between 2005 and 2015, the Chinese market share of eucalyptus shipments increased by 20 p.p. (total market pulp: + p.p.) 10% 10% 12% 14% China's Share of Market Pulp (2) 21% 17% 22% 23% 23% 24% 25% (million t) 14 26% Nov Eucalyptus Hardwood Total % Compared to the global Market Pulp (1) PPPC Pulp China Flash Report October 2016 (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 6 6 East Europe 5 LatAm China Africa 1 65

66 66 Growth rate Chinese GDP vs. Eucalyptus Shipments to China (Sept-09 = base 100) China GDP Eucalyptus Shipments Source: Bloomberg and PPPC W20 report (dez/2016)

67 Commodities Differentiation China GDP breakdown 8% 4% 4% 3% 3% 2% 2% 2% 2% 2% 2% 44% 47% 48% 48% 48% 48% 48% 46% 47% 45% 45% 49% 49% 48% 49% 49% 50% 50% 52% 51% 53% 53% 2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015E 2016E 2017E 2018E Consumption Investment Net Exports China commodity demand - basis 100 Corn Soybeans Wheat Crude oil Iron ore Sugar BHKP A 2009A 2010A 2011A 2012A 2013A 2014A 2015E 2016E 2017E 2018E Source: Itaú Macroeconomic Department and PPPC Oct/

68 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 68

69 mai-10 jun-10 jul-10 ago-10 set-10 out-10 out-10 nov-10 dez-10 jan-11 fev-11 mar-11 abr-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 mai-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 jun-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 jul-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 ago-15 set-15 out-15 nov-15 dez-15 jan-16 fev-16 mar-16 abr-16 mai-16 jun-16 jul-16 jul-16 ago-16 set-16 out-16 nov-16 dez-16 jan-17 BHKP prices - CIF China (US$/ton) Shipments (000 ton) Benefiting From China s Growth Source: PPPC Global 100 ( 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 69

70 USD/Adt, 2013 cost level Global BHKP Market Pulp Supply Cost Curve COST CURVE EVOLUTION Cost position of marginal producer Cumulative Capacity Million t/a Source: Pöyry. 70

71 Tightening plantation wood and chip supply could add to the cash cost of Asian pulp mills Source: Pöyry. 71

72 *forward curve Dec/ Current Zero Cost Collars ZCC Position 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 4Q18 Total Notional (USD MM) ,760 Strike médio put (avg.) Strike médio call (avg.) FWD (BRL/USD)EoP Notional (Total): USD 1,760 Million

73 FREE CASH FLOW (1) Positive quarterly FCF in the last 5 years, even during appreciated FX (1) Excluding H2 Project, dividends, pulp logistics and land purchase effects. 73 USD million Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 EBITDA Margin 33% 28% 30% 37% 37% 41% 39% 39% 41% 42% 41% 35% 35% 45% 50% 50% 56% 54% 52% 43% 43% 36% Average FX

74 (1) Considering FX (2) Considering average FX for the period 74 Fibria s tax structure Description and Amount Maturity (a) Operating income As stated in the income statement (-)(b) Goodwill (Aracruz acquisition) - Annual tax deduction: US$ 27 million (tax) - Remaining Balance Dec/16: US$ billion (base) 2018 (-)(c) Forestry Capex in MS state (net) (+/-)(d) Exchange variation (cash) 2016 tax deduction related to depletion: US$ 31 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 Dec/16: US$ 245 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 Dec/2016: - PIS/COFINS: US$ 234 million - Withholding tax (IR and CSLL): US$ 303 million - Reintegra: US$ 27 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

75 Dividends 75

76 76 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

77 77 Approval of Dividend Policy 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.

78 (1) Considering March 7, 2016 FX R$/US$ Dividends 2016 April 27, 2016 Mid-May, 2016 Mid-November, 2016 GSM approved dividend distribution of USD80 million (1) (1.1% of dividend yield as at Dec. 31, 2015). Dividend payment of USD 80 million. Extraordinary dividend appraisal (not approved) 2017 April, 2017 Mid-May, 2017 Mid-November, 2017 Mid-December, 2017 OGM to approved dividend distribution Dividend payment to occur from May onwards Extraordinary dividend appraisal Extraordinary dividend payment (if approved)