Morgan Stanley Global Emerging Markets Conference May 2014
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.
1 2 3 4 Company Overview Pulp and Paper Market Financial and Operational Highlights Final Remarks Agenda 3
Company Overview 4
A Winning Player Superior Asset Combination Main Figures 1Q14 LTM Pulp capacity million tons 5.300 Net revenues R$ billion 7.1 Total Forest Base (1) thousand hectares 962 Três Lagoas Belmonte Veracel Caravelas Portocel Aracruz Jacareí Santos Planted area (1) thousand hectares 558 Net Debt R$ billion 7.0 Net Debt/EBITDA (in Dollars) (2) X 2.4 Net Debt/EBITDA (in Reais) X 2.4 Port Terminal Pulp Unit Source: Fibria (1) Including 50% of Veracel, excluding forest partnership areas and excluding the forest base linked to the sale of forest assets in Southern Bahia State and Losango. (2) For covenants purposes, the Net Debt/EBITDA ratio is calculated in Dollars. 5
Fibria s Units Industrial Capacity * Veracel is a joint venture between Fibria (50%) and Stora Enso (50%) and the total capacity is 1,120 thousand ton/year 6
7 Fibria s Commercial Strategy Sales Mix by End Use - Fibria Highlights LTM 1Q14 LTM 1Q14 Worldwide presence Europe 39% Others 8% N. A. 28% Asia 25% Sales Mix by Region - Fibria Tissue 53% P&W 29% Specialty 18% 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 Efficient logistics set up 11% 9% 11% 10% 10% 10% 11% 10% 9% 10% 8% 8% 8% 9% 14% 22% 25% 20% 31% 28% 20% 23% 25% 21% 26% 26% 26% 26% 46% 37% 41% 43% 41% 36% 43% 35% 36% 46% 35% 44% 42% 46% Low dependence on volatile markets such as China Low credit risk 100% certified pulp (FSC and PEFC/Cerflor) 30% 20% 29% 29% 24% 18% 26% 26% 30% 22% 28% 31% 30% 19% 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 North America Europe Asia Others
8 Shareholder Structure and Corporate Governance Votorantim Industrial S.A. (1) 29.42% BNDES Participações (1) 30.38% Free Float (2) 40.20% Fiscal Council General Meeting Board of Directors 20% independent members Role of CEO and chairman is split Finance Committee Statutory Audit Committee Innovation Committee Sustainability Committee Personnel and Remuneration Committee Listed on Novo Mercado, highest CG 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 with ADRs Policies approved by the Board of Directors: Indebtedness and liquidity Market risk management Risk management Corporate governance Information disclosure Stock trading (1) Controlling group (2) Free Float 40.14% + Treasury 0.06%
Acknowledgments: Governance, Transparency, Profitability & Sustainability Valor 1000 Company of the year, among all industries, according to Valor Econômico. XVII ANEFAC-FIPECAFI - SERASA EXPERIAN Prize Fibria is among the most transparent public companies in Brazil, recognized for the quality of its 2012 financial statements. International Recognition by Corporate Governance Report Fibria is one of the 5 Brazilian companies nominees to the Best Corporate Governance Award from London. The Best Companies to the Shareholders Prize of Capital Aberto Magazine Fibria was elected as 2 nd place. The prize highlights the business profitability, share profitability, liquidity, corporate governance and sustainability. 2013 Institutional Investor Latam Ranking - P&P Sector Fibria was ranked for the forth consecutive year (2010, 2011, 2012 and 2013). In 2013 Fibria was ranked in four categories: CEO, CFO, IR Team and IR Professional Época Negócios 360º Fibria was elected as 1st place in the pulp & paper sector in the corporate governance and future's vision categories DJSI World and DJSI Emerging Markets CDP Brasil 100 Climate Change 2013 Report Fibria was selected as one of the 10 best companies in transparency. The only one in the pulp & paper sector. RobecoSAM - Sustainability Investing Magazine Selected to Dow Jones World and Emerging Markets Sustainability Indices for 2013/14 as the industry leader of Forestry Resources and Paper sector. Fibria is the only Latin America company selected by RobecoSAM (responsible for DJSI) as one of the 10 worldwide leaders in SRI magazine s The 10 Game Changers Changing the industry through sustainability. 9
Pulp and Paper Market 10
11 Today, according to public information, there will be a 11% increase of the pulp market capacity between 2014 and 2016 SOFTWOOD (1) 25.5 MT + HARDWOOD (1) = 31.1 MT MARKET PULP (1) 56.6 MT 2014-2016 (2) : New capacities: 0.7 mt Announced Closures: (0.35) mt Net: 0.35 mt 2014-2016 (3) : New capacities: 6.0 mt Announced Closures: (0.13) mt Net: 5.9 mt 2014-2016: New capacities: 6.7 mt Announced Closures: (0.5) mt Net: 6.2 mt (1) Source: PPPC Special Research Note May 2014 does not include Sulphite and UKP (2) Projects included: Paper Excellence (70kt); UPM Kymi (170kt); Klabin (200kt); Sodra Värö (275kt) Closures: Birla AV Terrace Bay (350kt) (3) Projects included: Maranhão (1.5mt); Montes del Plata (1.3 mt); Oji Nantong (700kt); Eldorado (200kt); CMPC Guaíba II (1.3 mt); Klabin Ortigueira (1.0mt) Closures: April Rizhao (130kt)
jul-08 out-08 jan-09 abr-09 jul-09 out-09 jan-10 abr-10 jul-10 out-10 jan-11 abr-11 jul-11 out-11 jan-12 abr-12 jul-12 out-12 jan-13 abr-13 jul-13 out-13 jan-14 abr-14 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Global Pulp Market Demand Hardwood demand will continue to increase at a faster pace than Softwood 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Hardwood (BHKP) vs. Softwood (BSKP) (000 ton) 2013-2018 CAGR: Hardwood: +2.8% Softwood: +0.7% Demand growth rate 000 ton 1998 2008 2018 Growth 1998-2008 Growth 2008-2018 Hardwood 15.0 24.5 32.8 63% 34% Eucalyptus 6.0 14.2 23.2 137% 63% Softwood 17.6 21.6 24.8 23% 15% Hardwood Softwood Market Pulp 32.6 46.1 57.1 Source: PPPC Source: PPPC Shipments of Eucalyptus Pulp (1) NBSK vs. BHKP - Prices (1) 2013 vs. 2012 +6% +23% 844kt +12% 674kt 196kt -1% -37kt Total North America Western Europe China 250 200 150 100 50 0 1100 1000 900 800 700 600 500 400 (1) Source: PPPC World 20 December/2013 (1) Source: FOEX Spread Avg. Spread BHKP NBSK 12
USD/Adt, 2013 cost level Supply structural changes puts pressure on the industry MARKET PULP CAPACITY RANKING 2013 (000T) MAIN PROJECTS Fibria APRIL Arauco CMPC Georgia Pacific UPM-Kymmene Paper Excellence Metsa Group Suzano Stora Enso Sodra Weyerhaeuser IP Ilim Mercer Domtar Resolute Forest Eldorado ENCE Canfor Source: Hawkins Wright, Poyry and Fibria Analysis 0 2000 4000 6000 Bleached Softwood Kraft Pulp (BSKP) Bleached Hardwood Kraft Pulp (BHKP) Unbleached Kraft Pulp (UKP) Mechanical Project Country Capacity Timing Fiber Status Arauco / Stora Uruguay 1.3Mt 1Q2014 BEKP Confirmed CMPC Guaíba II Brazil 1.3 Mt 2Q2015 BEKP Confirmed Klabin Paraná Brazil 1.5 Mt 2Q2016 BEKP/ BSKP/Fluff Confirmed APP South Sumatra Indonesia 2.0 Mt 4Q2016 BHKP Confirmed Fibria Três Lagoas II Brazil 1.75 Mt - BEKP Unconfirmed COST CURVE EVOLUTION Cumulative Capacity Million t/a Cost position of marginal producer 13
BHKP prices - cif Europe (US$/ton) Gross capacity addition should not be counted as the only factor influencing pulp price volatility Greenfield capacity (000 ton) 1,000 2.0 900 1.8 800 700 600 500 APP Hainan Veracel Nueva Aldea Fray Bentos Mucuri Três Lagoas Rizhao Eldorado Maranhão Montes del Plata Guaíba II 1.6 1.4 1.2 1.0 400 300 Valdivia Santa Fé Kerinci PL3 APP Guangxi Chenming Zhanjiang 0.8 0.6 200 0.4 100 0.2 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 0.0 Source: Hawkins Wright, Poyry and Fibria Analysis 14
15 Capacity closures DO happen 0 Closures of Hardwood Capacity Worldwide 000 ton -200-85 -105-130 -400-600 -540-500 -800-1000 -1200-1400 -910-1,085-1,180-1,260 2006 2007 2008 2009 2010 2011 2012 2013 2014-2015 Source: PPPC and Fibria
Technical Age and Scale in the Market Pulp Industry Further closures are expected due to lack of adequate investments in the industry 16 Hardwood (BHKP) Market Pulp Softwood (BSKP) Market Pulp 3,000 PM Capacity, 1000 t/a Weighted average technical age 14.2 years 2013/IQ STRONG 3,000 PM Capacity, 1000 t/a Weighted average technical age 21.2 years 2013/IQ STRONG 2,500 2,000 Aracruz 2,500 2,000 1,500 Weighted average capacity 1184 000 t/a Jacareí Três Lagoas 1,500 1,000 Veracel 1,000 Weighted average capacity 503 000 t/a 500 500 0 30 WEAK 25 20 15 10 Technical Age, years 5 0 0 30 WEAK 25 20 15 10 Technical Age, years 5 0 North American Pulp Mills Other Pulp Mills Closures Grade Switch On & Off
17 and when other expenses are plugged, we see no one but Fibria is generating positive free cash flow in the industry Capacity (k tons): 660 595 1,775 585 565 355 1,005 2,410 1,960 330 1,095 3,680 4,165 12,750 = 31,930 809 FOEX Total Cash Cost of BHKP delivered to Europe (US$/t) 48 40 71 528 493 502 70 47 42 453 479 464 112 36 42 388 406 426 50 41 45 56 67 519 44 113 57 68 316 304 306 286 261 229 Interest CAPEX Others SG&A Net price Working Capital = +11 Cash Cost (US$/t) Delivery (US$/t) Source: Hawkins Wright (Outlook for Market Pulp, March2014) Fibria s 1Q14 LTM considering a FX of R$/US$2.25.
18 China: Paper capacities expansion continues to go on Ktons 2013 2014E 2015E Total P&W (woodfree) 385 150 576 1,111 Tissue 1,029 1,831 471 3,331 Cartonboard 2,128 1,650 180 3,958 Total 3,542 3,631 1,227 8,400 China corresponds to 2/3 of global tissue capacity expansion
Benefiting From China s Growth China s Hardwood Imports of BHKP by Country (1) ( 000s t) 2,500 2,000 1,500 1,000 500 0 1,922 1,889 BHKP Total 760 805 Latin America 1Q2013 1Q2014 556516 439 525 * includes Russia, China, Thailand and New Zealand Latin America is the leading exporter of BHKP to China, accounting to approximately 42% of China's total imports in 1Q2014. 60 57 53 10 21 9 Others* Indonesia USA Canada Western Europe (million t) 35 30 25 20 15 10 5 0 World Tissue Consumption, 1991-2013 (3) LTM Growth Rate +4.2% (kg/person/year) 1991 1996 2001 2006 2009 2010 2011 2012 2013 N.America W.Europe E.Europe L.America Middle East Japan China Asia FE Oceania Africa 12,000 10,000 8,000 6,000 4,000 2,000 0 China's Share of Market Pulp (2) Between 2005 and 2013, the Chinese market share of eucalyptus shipments increased by 14 p.p. (total market pulp: + p.p.) 10 10 9 10 9 7 11 13 12 12 16 14 22 26 21 16 17 17 22 20 19 21 20 23 21 23 2005 2006 2007 2008 2009 2010 2011 2012 2013 Eucaplyptus Hardwood Total (1) PPPC Pulp China (2) PPPC W20. Coverage for chemical market pulp is 80% of world capacity (3) RISI (In percentage) 23 Per Capita Consumption of Tissue by World Region (3) (Kg/capita/year) 30 25 20 15 10 5 0 24 15 15 N. West America Europe 12 Japan Oceania 7 East Europe 6 5 LatAm China Africa 1 19
20 Internal Consumption and Urbanization China s private consumption vs. exports (CNY trillion and annual % change) (1) Chinese Urbanization Driver of Long-Term Growth (UN Population Projections, Millions) (2) Shift from exports to private consumption; Positive effects on households income and rising standards of living. Sources: (1) the Economist. (2) RISI China Pulp Market Study.
Financial and Operational Highlights 21
22 The maturity of synergies captured since Fibria s creation improved its operating indicators PRODUCTION VOLUME (000 t) BEST PRACTICES AND OPERATING STABILITY +15% CASH COST (R$/ton) -21% 656 624 596 5,054 5,184 5,299 5,271 5,272 549 545 432 448 471 473 505 515 4,600 2009* 2010* 2011 2012 2013 1Q14 LTM SG&A (R$ million) STRUCTURE AND PROCESS SIMPLIFICATION 2009* 2010* 2011 2012 2013 1Q14 LTM Historical Value Inflation Effect** EBITDA (R$ million) - EBITDA MARGIN (%) 900 826 766-17% 678 699 29% 40% 34% 36% 40% 41% 593 593 605 584 648 659 1,522 2,526 1,964 2,253 2,796 2,910 2009* 2010* 2011 2012 2013 1Q14 LTM Historical Value Inflation Effect** 2009* 2010* 2011 2012 2013 1Q14 LTM * Excludes Conpacel ** IPCA index considered to calculate the inflation effect
Indebtedness Net Debt (Million) Gross Debt (Million) Net Debt/EBITDA (R$) Net Debt/EBITDA (US$) 3.1 3.1 2.8 2.4 2.6 2.4 7,516 7,849 6,969 3,732 3,351 3,080 9,898 9,773-11% 4,915 4,172-24% 8,445 3,732 Mar/13 Dec/13 Mar/14 R$ US$ Debt Amortization Schedule (R$ million) Mar/13 Dec/13 Mar/14 R$ US$ 2,959 1,484 (revolving) 1,475 (cash) 1,288 777 773 1,386 1,230 943 650 1,367 26 5 1,356 Liquidity 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Pre-payment BNDES NCE ACC/ACE/Other Voto IV Bond Pro Forma 23
24 Fibria delivered the most significant leverage reduction in the LTM 7.2 Net Debt/EBITDA (x) (1) 6.3 5.6 4.7 3.9 2.5 2.2 1.7 1.1 3.6 3.3 2.0 2.9 1.9 1.8 2.2 2.1 1.4 1.6 3.0 3.2 1.9 2.0 1.8 5.2 4.8 4.2 4.2 4.8 4.8 2.7 2.5 2.7 2.4 2.0 2.3 2.5 2.2 2.3 5.7 5.0 5.0 5.1 5.1 5.2 4.7 4.7 4.5 4.6 4.3 3.8 4.1 3.7 3.4 3.4 3.1 3.4 3.3 3 3.3 2.8 2.8 2.9 3.1 2.9 3.0 2.8 2.5 2.3 2.4 2.4 2.4 2.2 2.6 4.8 2.9 2.4 1.7 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 Ratings Fibria Arauco¹ CMPC Klabin Suzano S&P BB+/Positive BBB-/Stable BBB-/Stable BBB-/Stable BB/Negative Moody s Ba1/Positive Baa3/Negative Baa3/Negative - Ba2/Stable Fitch BBB-/Stable BBB/Stable BBB+/Stable BBB-/Stable BB-/Positive (1) Fibria s historical data in BRL.
Liquidity Events: delivered as promised Net Debt/EBITDA (x) R$ 4.8 5.2 4.7 4.5 3.4 3.1 3.3 3.0 2.8 2.4 Dec/11 Mar/12 Jun/12 Sep/12 Dec/12 Mar/13 Jun/13 Sep/13 Dec/13 Mar/14 Sources (R$ Million) Uses (R$ Million) 1,268 5,715 Available REFIS 1,403 1,625 2014 Bond prepayment 850 836 1,851 2013 Bond prepayment 1,361 EQUITY OFFERING FOREST SALE 2012 (1) FCF 2012 LAND DEAL FCF 2013 TOTAL 1,045 2012 Bond prepayment (1) Losango and forestry assets and land in the south of Bahia State 25
Interest expense and cost on foreign currency debt 143 126 133 137 123 125 123 122 126 120 134 120 117 109 94 93 87 85 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 6.8 6.3 6.0 6.0 5.9 6.3 5.8 5.5 5.5 5.5 5.4 5.2 5.2 5.2 4.7 4.5 4.6 4.1 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 Fonte: Fibria e Bloomberg 26
27 Fibria 2024 New Bond Issuance Fibria 2024 Principal: US$ 600 millon Issuance Date: May/2014 Coupon: 5.25% a.a. Bookbuilding: 11.5x Spread over T10Y: 275.0 bps - SEC registered - IG document Highlights - Increased Debt profiles - Fibria 2021 Early redemption equals to 78% of the total Issuance US$ 600 million - For liability management purposes only - Savings of US$ 5.5 MM in interest per year
28 Fibria delivers one of the highest EBITDA/t and FCF/t of the industry Free cash flow generation (1) - 1Q14 LTM (R$ Million) 2,910 (1,340) (516) 132 (30) (45) 1,111 Adjusted EBITDA Capex Net Interest Working Capital IR/CS Other Free Cash Flow (1) Does not include: the capital gain on assets sales, Bonds repurchases and the tax payment (REFIS) over profit earnings abroad Free Cash Flow per ton - 1Q14 LTM (R$/ton) 560 (258) (99) 25 (6) (8) 214 Adjusted EBITDA Capex Net Interest Working Capital IR/CS Other Free Cash Flow
FX and Pulp Price explain 80% of Fibria s EBITDA Margin 2.00 Exchange Rate Average (R$/US$) 1.76 1.67 1.95 2.16 2.25 Average Price FOEX (US$/t) 562 844 810 751 791 787 EBITDA Margin 29% 40% 34% 36% 40% 41% EBITDA (R$ million) 2,526 1,964 2,253 2,796 2,910 1,522 2009 (1) 2010 (1) 2011 (1) 2012 2013 1Q14 LTM (1) Excludes Conpacel 29
30 Maintenance CAPEX (R$ Million) 1,520 1,416 1,287 1,078 Approx. 18% increase 2011 2012 2013 Land Deal: Rural Partnership Non recurring wood purchase Inflation FX Rate Modernization Others 2014E
Cash Production Cost saw an increase of 17% over the past 5 years Cash Production Cost (1) (R$/ton) CAGR: + 4% 2014 Cash Production Cost: 505 Target to have the cash cost increase below inflation 432 448 471 473 Wood costs will represent the main impact Non recurring increase mainly due to third party wood Operating excellence actions focused on keeping cash cost below inflation 2009 (2) 2010 (2) 2011 2012 2013 In 2015 the wood impact will be structurally eliminated (1) Excludes Conpacel 31
Final Remarks 32
33 Fibria is seeking value creation for its shareholders with capital discipline PULP - Growth with discipline - Best portfolio of projects INDUSTRY CONSOLIDATION? Potential Growth Prospects BIO-ENERGY - Complementary to pulp - Ensyn OTHER OPPORTUNITIES - Portocel - Land and forest
34 Key Highlights Sound credit profile, with decreasing leverage ratios Market leader with a highly profitable operation and cash cost below industry average Highly experienced and qualified management team Highly recognized and awarded by industry specialists
Back up 35
36 Hedge Hedging Strategy Debt Hedge: - Swap operations (currency and rate) - Maturity aligned with original debt - No margin call Operating Hedge: - Net FX exposure protection in US$ in up to 18 months - Current strategy: Zero Cost Collar - No leverage - No margin call - 03/31/2014 data: - Notional: US$ 932 million - 41% of protected net exposure - Maturity: up to 12 months Governance 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 flow is defined according to the FX risk management policy. Governance, Risk and Compliance (GRC) Team: - Report to CEO - Responsible for monitoring policies compliance - Independent from Treasury ZeroCostCollar x NDF Payoff All Fibria operations are registered at CETIP
37 Fibria s tax structure Fiscal - annual adjustment Tax benefits (R$) Tax loss carry forward and tax credits Benefit Amount Maturity Goodwill (Aracruz acquisition) Forestry Capex in Mato Grosso do Sul state Annual tax deduction: ~R$89 million (tax) Remaining Balance Dec./13: R$1.29 billion (base) 2014 s tax deduction related to depletion: R$ 5,5 million (tax) 2018 Undefined Benefit Tax loss carryforward Accumulated tax credits Amount Balance up to Mar./14: R$631 million (base) Balance Mar./2014: -PIS/COFINS: R$533 million - withholding tax (IR and CSLL): R$231 million Actual tax payment (cash basis) 2009 2010 2011 2012 2013 R$7 million R$16 million R$4 million R$15 million R$31 million
Due to productivity gains in its forests, Fibria had the opportunity to explore this new ownership model 38 FIBRIA S GAINS IN IMACEL DUE TO INVESTMENTS IN BIOTECHNOLOGY (TONS OF PULP/HA/YEAR) MAI* Pulp: (adt/ha/year) 15.0 15.0 15.0 15.0 15.0 10.6 10.9 12.1 Conservative assumption 2012 field trials = 11.9 2010 2015 2020 2025 2030 2035 2040 2045 *MAI: Mean annual increment Actions: Genetic improvement Excellence in forestry management Superior industrial efficiency
39 Leadership position Industry Outlook (1) Fiber Consumption 403 million t 58% 42% Recycled Fiber 234 million t Pulp 169 million t 18% 82% Mechanical 31 million t Chemical 139 million t 60% Integrated Mills 84 million t 40% Market Pulp 56 million t 49% 51% Softwood/Other 27 million t Hardwood 29 million t 35% 65% Acacia/Other 10 million t Eucalyptus 19 million t 71% Other Eucalyptus Pulp producers: 13 million t 29% (1) Fiber Consumption, Recycled Fiber and Pulp: RISI Market Pulp, Hardwood and Eucalyptus: PPPC Special Research Note - May 2014
Global Paper Consumption CAGR 1996 2006 Developed Markets: + 1.7% Emerging Markets : + 6.0% 117,611 CAGR 2007 2016 Developed Markets: - 4.0% Emerging Markets : + 4.1% 114,507 85,291 P&W Consumption (000 tons) (1) 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Developed Markets Emerging Markets CAGR 1996 2006 Developed Markets: + 2.4% Emerging Markets : + 6.9% 26,877 CAGR 2007 2016 Developed Markets: + 1.4% Emerging Markets : + 6.7% 37,474 15,548 Tissue Consumption (000 tons) (1) 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Developed Markets Emerging Markets Source: RISI 40
41 Cash Production Cost 1Q14 507 Cash Production Cost (R$/t) 466 549 Cash Production Cost ex-downtimes (R$/t) 463 466 524 1Q13 4Q13 1Q14 1Q13 4Q13 1Q14 1Q14 vs. 1Q13: - Higher transportation costs - Exchange rate - Higher fixed costs - Higher input consumption - Third party wood (1Q13: 9% I 1Q13: 11%) Management initiatives seeking to maintain the cash cost increase below the inflation.