Fibria Corporate Presentation April 2010 1
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. 2
Agenda The Company Market Positioning Pulp and Paper Market 4Q09 Financials Recent Events 3
The Company 4
VCP and Aracruz Merged to Create Fibria Shareholder Structure Votorantim Industrial S.A. BNDESPar Free Float 29.3% 33.6% (1) 37.1% 50.0% 50.0% Veracel Celulose S.A. Conpacel Present value of R$4.5 billion of announced post-merger synergies Up to 2012, 90% of actions to extract synergies are expected to be in place Logistics Tax 6% 2% 11% Others 27% Industrial Commercial 15% 16% SG&A 23% Forestry (1) Position as of Dec 30, 2009. BNDESPar has 21% linked to a shareholder s agreement with VID during the first 3 years, and 10.9% during the following 2 years. 5
Improved Corporate Governance Board of Directors Board Advisory Committees José Luciano Penido Raul Calfat Chairman of the Board Indicated by Votorantim Auditing Wang Wei Chang João Miranda Indicated by Votorantim Indicated by Votorantim Personnel and Remuneration Alexandre D Ambrosio Armando Mariante Carvalho Junior Indicated by Votorantim Indicated by BNDES Finance Eduardo Rath Fingerl Indicated by BNDES José Armando de Figueiredo Campos Independent Member Sustainability Alexandre Gonçalves Silva Independent Member Executive Board Board of Directors CEO Carlos A. Aguiar * Ind. Ops & Engineering Comm. & Int l Logistics Paper, Planning, Procurement, and Forestry Ops. & Tech Controllership & Risk Management Human and Org. Development Francisco Valério João Felipe Carsalade Marcelo Castelli Evandro Coura Miguel Caldas Each officer with more than 20 years experience in the sector *The Company s Board of Directors have decided that FIBRIA s CEO, Carlos Augusto Lira Aguiar, will accumulate the position of Treasury and Investor Relations Officer until further decision of the Board of Directors. 6
Market Positioning 7
Creation of a Winning Player Superior Asset Combination Competitive Strengths Três Lagoas Conpacel Pulp Mill Paper Mill Port Terminal Belmonte Veracel Caravelas Portocel Aracruz Piracicaba Jacarei Santos Pulp production capacity: 5.4 MT / year Paper production capacity: 358 kt / year Total area: 1.0 million ha (1) Eucalyptus plantation: 585 thousand ha (1) 4 plants and operation of 3 port terminals, including the only specialized wood pulp terminal in Brazil, owned by us High yield in eucalyptus production (avg 45 m 3 /ha/year) and certified forests Short harvest cycle: 6 years vs. 25-70 years in Southern U.S., Canada and Scandinavia Leadership in Market Pulp Scale and Integrated Operations Unique Forestry Management: Advanced Forestry Techniques and Short Harvest Cycle Forest to Port Integration Trough Efficient Logistics Low Production Cost DNA Strong / Reliable Customer Base Modern Industrial Plants Data as of Dec 30, 2009. (1)Does not include partnership program which represents 128 thousand ha. 8
Undisputable Leadership in the Global Market Pulp Dominant Position in a Growing Market Pulp Production Capacity Market Share (1) 2009E in ktons 1 st Fibria 5,400 Ara uco ~ Twice APRIL CMPC Sodra Botnia Tembec Suzano Weyerha eus er APP Canfor Domta r IP Ilim Georgia Pacific ENCE Mercer Wes t Fra ser Cenibra Stora Ens o the size BSKP BHKP UKP Mech. 0 1.000 2.000 3.000 4.000 5.000 6.000 3% Total Pulp: 188 million t 22% Total Hardwood Pulp: 25 million t 11% Total Market Pulp: 48.5 million t 32% Total Eucalyptus Pulp: 17 million t Source: PÖYRY, 2007 / As for Market Pulp: Pulp and Paper Products Council (PPPC) 2009 and Fibria. (1) Market Share estimated considering 2009 nominal capacity. 9
Low Production Cost DNA Unique Expertise Enabling the Lowest Cash Cost in the Market and High Profitability Fibria s Margin vs. Macroeconomic Fundamentals (1) Cash Costs (2) Average Price BEKP (US$/ton) (1) 641 705 783 680 Cash Cost (US$/t) 530 497 456 454 443 416 408 Wood Others 2,44 583 Exchange Rate Average (RS/US$) (1) 2,18 1,95 1,84 565 2,00 1,74 254 175 276 322 207 249 303 151 177 266 Iberia 239 177 103 305 290 269 261 259 119 135 155 163 171 135 106 96 (3) 37% 39% 2.196 Hardwood Cash Cost (US$/t) vs. Capacity (kt) US$/ton EBITDA Margin 34% 37% 1.697 30% 600 500 EBITDA (R$ million) 1.013 1.115 880 28% 400 300 Iberia 503 200 259 100 0 2005 2006 2007 2008 2009 4Q09 (1) Source: Companies earnings releases, RISI and Brazilian Central Bank (2) Source: Hawkins Wright Estimate for 4Q09 (3) Fibria's 4Q09 figures 0 2.000 4.000 6.000 8.000 10.000 12.000 Capacity (kt) 10
State-of-the-Art Production Facilities Advanced Technology and Production Process Lead to Lower Usage of Raw Materials, Reducing Costs Modern Plants Competitive Advantages Average Plant Capacity ( 000 tons) 2,500 2,000 1,500 1,000 500 Russia USA Japan Portugal Canada Sweden Indonesia Indonesi a Brazil Chile Finland France Spain South Africa China Uruguay Aracruz Capacity 2.3 mt Technical age: 9 Três Lagoas Capacity 1.3 mt Technical age: 0 Jacareí Capacity 1.1 mt Technical age: 5 Veracel Capacity 1.1 mt Technical age: 3 LARGEST SINGLE LINE PULP PRODUCTION FACILITY IN THE WORLD BEST YIELD PER HECTARE OF THE WORLD Streamlined and efficient operations due to modern plants Environmental-friendly production process Reduced emissions and disposition of residues 40 30 20 10 Efficient use of chemicals Technical age of the equipment (years) and Allowing for a Unique Track Record of Quality Products 11
Unique Brownfield Potential Growth Fibria has the Best Sites Ready to Almost Duplicate Capacity Historical and Planned Capacity Increase In million of tones 1978: Start-up of mill "A" at Aracruz (Barra do Riacho) unit 1988: Acquisition of Celpav 1992: Acquisition of Papel Simão (Jacareí unit) 10.7 Best sites for additional capacity 5.3 1996: New pulp line at Jacareí mill 1991: Start-up of mill "B" at Barra do Riacho unit Barra do Riacho IV 1.5 2003: Expansion of Jacareí mill 2003: Acquisition of Riocell (Guaiba Unit) 2005: Start-up of Veracel 2002: Start-up of mill "C" at Barra do Riacho unit 2007: Asset swap Luis Antônio for Três Lagoas 2008: Establishment of Conpacel consortium 2009: Start-up of Três Lagoas mill 5.4 Três Lagoas II Losango I 1.5 1.5 Veracel II 0.8 Brownfield Brownfield Greenfield Brownfield 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 Expansion Aracruz VCP Fibria 12
Long Term Relationship With Key Clients Premium Paper Producers Value High Quality Pulp Customized Products Global Footprint Supplies customized pulp products to specific paper grades Sole supplier to key customers focused on eucalyptus pulp to the tissue market Top 10 main customers represent on average 65% of sales Uses of Fibria s Pulp - 2009 Specialty 24% 43% Tissue Europe 31% Switzerland P&W 33% North America 23% Hungary Asia 36% Beijing Miami Hong Kong Sales Destination (1) Brazil 10% Offices Which Implies in Less Volatility in Sales NY004GAK_1.wor Volume Throughout Economic Cycles 1 Breakdown of sales destination in the last 12 months ending December 31, 2009. 13
Pulp and Paper Market 14
Positive Commodity Cycle and Demand Recovery World market pulp shipments to capacity World P&W paper shipments to capacity 97% 95% 95% 94% 93% 92% 92% 92% 93% 92% 91%91% 90% 90% 90% 89% 88% 86% 86% 86% 85% 83% 82% 79% 77% 98% 97% 95% 93% 93% 92% 92% 89% 88% 87% 85% 78% 76% 79%79% 77% 73% 89% 87% 86% 81% 79%79% 78% jan/08 feb/08 mar/08 apr/08 may/08 jun/08 jul/08 aug/08 sep/08 oct/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 jan/08 feb/08 mar/08 apr/08 may/08 jun/08 jul/08 aug/08 sep/08 oct/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 Source: PPPC World pulp producers average days of supply Source: PPPC European pulp consumers days of supply 60 50 40 30 20 10 Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 30 30 25 23 Jan-10 35 20 15 Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Jan-10 Source: PPPC Source: Utipulp 15
Pulp Supply / Demand Expected to Rebalance in the Medium Term Market Pulp: world demand growth China: Eucalyptus pulp shipments ( 000 t) 55% 2% -11% -11% 10% -17% Average 163 k tons 101 146 186 181 192 132 134 98 65 93 210 419 307 238 458 Average 305 k tons 368 318 307 307 323 299 256 247 233 Total North America Europe Latim America 2009 vs 2008 Japan China BHKP List pulp price (FOEX) vs BRL/US$ Jan/08 Feb/08 Mar/09 Apr/08 May/08 Jun/08 Jul/08 Aug/08 Sep/08 Oct/08 Nov/08 Dec/08 Jan/09 Feb/09 Mar/09 Apr/09 Global market recovery May/09 Jun/09 Jul/09 Aug/09 Sep/09 Oct/09 Nov/09 Dec/09 140 130 120 110 100 90 +36% Demand Paper demand recovery; China keeping up the pace. Low consumers and producers inventories Market downtimes; Currency Appreciation of local currencies against the US$. 80 70 60 Jan/09 Feb/09 Mar/09 Apr/09 May/09 Jun/09 BRL/USD Jul/09 Aug/09 Sep/09 Oct/09 Nov/09 FOEX BHKP List Price Dec/09 Jan/10 Feb/10-20% Successive announcements of list price increases (as of April.10) North America: US$870/t Europe: US$840/t Asia: US$800/t 16
China's presence in the market pulp sector China's Hardwood imports of BHKP by country China's share of market pulp (%) Growth in 2009 Pulp shipments ('000 t) and market share (%) 7.000 2008 10.000 Total Market Pulp 6.000 +59% 9.000 8.000 BHKP BEKP 21% 5.000 7.000 'o ooo t 4.000 3.000 2.000 1.000 0 BHKP Total +107% Brazil +2% Indonesia +51% Chile +12% Russia +117% Uruguay Canada USA Others Tailândia 'o ooo t 6.000 5.000 4.000 3.000 2.000 1.000 +38% +151% +142% +2% 0 14% 12% 22% 10% 10% 26% 12% 16% 9% 10% 13% 7% 11% 9% 2005 2006 2007 2008 2009 Brazil is the leading exporter of BHKP to China, accounting to approximately 41% of China's total imports in 2009. Between 2005 and 2009, Chinese market share of eucalyptus shipments increased by 17 p.p. (total market pulp: +11 p.p.) Source: Hawkins Wright Source: PPPC W20. Coverage for chemical market pulp is 80% of world capacity. 17
P&W Paper Capacity Changes P&W paper capacity withdrawls 2009-2010 (1) China: P&W paper capacity changes 2009-2011 (1) Company Region/Date 000's tonnes M Real Europe/2009 540 International Paper Europe/2009 250 Company / Mill Effective Date 000's tonnes Puyang Longfeng Jan 2009 350 Tralin, Gaotang Feb 2009 150 Others Europe/2009 440 Domtar North America/2009 265 2009 = 1.9 million t MCC Yinhe Paper Jul 2009 200 Guangxi Jindaxing Paper Q3 2009 200 2009 = 1.3 million t International Paper North America/2009 200 Yeuyang Paper Oct 2009 200 Others North America/2009 255 Fujian Nanping Paper Oct 2009 200 Stora Enzo Europe/2010 520 Yeuyang Paper 2010 200 Sappi Europe/2010 220 APP, Hainan Island Q1 2010 1,200 Others Europe/2010 80 2010 = 1.4 million t Sun Paper/IP Q2 2010 350 2010 = 2.3 million t Domtar North America/2010 200 Lee&Man 1H 2010 200 International Paper North America/2010 340 Jiangsu Oji Paper May 2010 400 Total P&W capacity withdrawls in Europe and North America 3,300 China Metalurgical Meili Paper Q1 2011 300 Shandong Huatai Paper Q1 2011 500 Shandong Chenming Q1 2011 1,250 2011 = 2.4 million t Guangxi Huajin Group late 2011 340 Total P&W capacity changes in China 6,040 (1) Source: TerraChoice Dec 2009 18
4Q09 Financials 19
Paper Business Paper: Sales volume ('000 t) Paper market recovery 123 110 111 Market Competition from imports Demand starting to grow again, but apparent consumption is still below 2008 levels 4Q08 3Q09 4Q09 Fibria Performance Sales volume and revenue mix: focus on specialty papers Seasonality: positive impact on sales volume Paper: Sales and Revenue mix Sales Volume Revenues 27% 30% 28% 21% 21% 23% Specialty/Other Coated Uncoated 40% 43% 42% 19% 19% 20% 52% 49% 49% 41% 38% 38% 4Q08 3Q09 4Q09 4Q08 3Q09 4Q09 20
Financial Performance Pulp: sales volume ('000 t) Pulp: sales mix ( 000 t) 2008 2009 1.460 1.032 1.276 40% 30% 31% 23% 8% 22% 10% 36% 4Q08 3Q09 4Q09 North America Asia Brazil Europe Net revenue (R$ million) Pulp Cash Cost (R$/t) 1.593 1.698 509 492 Cash cost w/o stoppages (R$/t) 1.402 473 426 433 451 441 403 4Q08 3Q09 4Q09 4Q08 1Q09 2Q09 3Q09 4Q09 4Q08 3Q09 4Q09 21
Financial Performance EBITDA (R$ million) and EBITDA margin (%) CAPEX (R$ million) 546 34% 426 503 1.609 1.005 1.247 116 30% 30% 4Q08 3Q09 4Q09 896 377 469 216 129 135 235 32 4Q09 2009 2010E Others Manteinence Expansion Net Income (R$ million) 503-79 424 +165 +22-30 +53-92 -193-84 -41-374 -150 Adjusted Ebitda Nonrecurring effects / noncash Ebitda Income tax expense Exchange Variation on Debt Derivatives Other Exchange Variation Interest on loan Income on financial instruments Other financial income Minority Interest Other (*) Net income 4Q09 (*) The amount is the sum of the Depreciation, Amortization and Exhaustion. 22
Debt Profile Maturity Schedule of Total Debt (R$ million) 3.908 Local Currency Foreign Currency 824 1.924 1.696 1.741 3.084 453 1.402 1.028 1.076 1.370 910 1.130 1.471 766 787 553 811 508 130 262 272 326 289 348 99 45 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Gross Debt by Index Gross Debt by type Gross Debt by currency 10% 2% 2% 50% 6% 3% 3% 4% 34% 40% 60% 12% 36% Pre Fixed Libor TJLP Currency basket CDI 15% 25% Pre Payment Families/OPA Bonds BNDES Derivatives ACC/ACE NCE Others Local Currency Foreign Currency 23
Recent Events 24
Recent Events Event Date Acquisition by VCP of additional 28% of Aracruz common shares Jan 20 VCP Capital Increase Apr 14 VCP conversion of prefered into common shares Jun 12 Tender Offer for Aracruz common shareholders Jul 02 Incorporation proposal for the 0.1347 ratio Aug 24 Merger of Aracruz shares into VCP approval Aug 24 Shareholderes Agreement - VID and BNDES Oct 29 End of withdrawal rights period Nov 12 End of Aracruz trading Nov 17 Fibria trading start (Bovespa: FIBR3 / NYSE: FBR) Nov 18 Approval of the merger of Aracruz into Fibria Dec 22 Source: Fibria 25
Investor Relations Team: Carlos Aguiar IRO André Gonçalves IR General Manager Fernanda Naveiro Vaz IR Consultant Anna Laura Linkewitsch IR Specialist Livia Baptista IR Analyst 26