2Q17 Earnings Conference Call
Disclaimer The statements in this presentation constitute projections or forward-looking statements. Such statements are subject to known and unknown risks and uncertainties that could cause the expectations expressed not to materialize or the current results to differ materially from the expected results. These risks include changes in future demand for the Company s products, changes in factors that affect domestic and international product prices, changes in cost structures, changes in the seasonality of markets, pricing actions by competitors, foreign currency fluctuations and changes in the political and economic environments in Brazil, in emerging markets or internationally.
2Q17 HIGHLIGTHS Results consistency... Adjusted EBTIDA¹ :R$ 1,157 MM +20% vs. 2Q16 growth of +37% vs. 1Q17 Operating cash generation² increase of:r$ 910 MM +26% vs. 2Q16 +46% vs. 1Q17 with strong operational and financial performance ROIC: 11.3% Pulp cash cost highlight in the industry:r$ 568/ton Leverage³ in healthy level:2.7x -4.8 p.p. vs. 2Q16 +0.7 p.p. vs. 1Q17-11% vs. 2Q16-3% vs. 1Q17 +0.6x vs. 2Q16-0.1x vs. 1Q17 ¹ Adjusted for non-recurring and/or non-cash factors. ² Operating Cash Generation = Adjusted EBITDA less sustaining capex. ³ Net Debt / Adjusted EBITDA.
2Q17 HIGHLIGTHS Results consistency... Robust demand for pulp and price increase Suzano Mais allows higher profitability in the paper business Cost and Capital discipline: cost and capex performance below inflation with strong operational and financial performance Tissue: on time and on budget Financial discipline: reduction in gross debt
History of transformation and evolution Cash Cost (R$/ton) COGS (R$/ton) +1.6% Inflation: +27% +3.6% Inflation: +27% 580 536 642 623 589 1,307 1,283 1,368 1,391 1,354 2013 2014 2015 2016 LTM¹ 2013 2014 2015 2016 LTM¹ SG&A (R$/ton) Operational Cash Flow (R$/ton) 196 166-7.1% Inflation: +27% 191 177 182 348 348 +62% 771 581 564 Continuous search for the best operation in the industry 2013 2014 2015 2016 LTM¹ ¹ LTM: last 12 months ended on 6/30/2017. FX (BRL/USD) Pulp Price in USD (Europe average PIX) 2013 2014 2015 2016 LTM¹ R$2.16 793 R$2.35 745 R$3.33 784 R$3.49 696 R$3.22 697
2017 of many deliveries... Structural Competitiveness Continuous focus on reducing costs and expenses Crystallizer installation at Mucuri Unit Delivery of the new ETS¹ in Mucuri Startup of the new cut size line in Mucuri Completion of debottlenecking in Imperatriz Unit Reduction in average distance Adjacent Business Beginning of tissue production in Mucuri and Imperatriz Units Higher Eucafluff volume Reshaping of the Industry Continuous balance sheet strengthening Proposed migration to Novo Mercado ¹Effluent Treatment Station (Mucuri - BA)
We want much more! Cash Cost (R$/ton) 642 623 589 570 Target Cash Cost 475 2015 2016 LTM 2Q17 2018¹ 2021-2022¹ ¹ Valores nominais de 2016. #Proud to be Suzano! Industrial Reduction of raw material consumption Greater dilution of fixed costs Forestry Average distance reduction: Bahia State: to 60km Maranhão State: to 120km São Paulo State: to 200 km Productivity increase (mean annual increment - IMA) Expressive additional cash generation by reducing production cost 2017 Operational Cash Flow Additional cash generation 2021 Operational Cash Flow
Restructuring to business units... CEO Walter Schalka Audit Department Mariano Zavattiero Pulp Executive Department Carlos Aníbal Paper Executive Department Leonardo Grimaldi Consumer Goods Executive Department Fabio Prado Forestry Executive Department Alexandre Chueri FuturaGene Department Stanley Hirsch Innovation and New Business Executive Dept. Renato Tyszler People and Management Executive Dept. Julia Fernandes Financial and IR Executive Department Marcelo Bacci Corporate and Legal Affairs Department Pablo Machado...allows greater autonomy and maximizes profitability
TISSUE Consumer goods operation close to start up Start Up: 3Q17 (Mucuri) and 4Q17 (Imperatriz) 2H17: Production of tissue jumbo rolls 2018: Beginning of final product production Focus on the Brazilian North and Northeast markets Tissue Equipment - Mucuri Unit (BA) New commercial and marketing team with expertise
Results consistency and continuous transformation Strategic Pillars Structural Competitiveness Adjacent Business Reshaping of the Industry...prepare Suzano for the FUTURE Cost Discipline Supply Discipline Capital Discipline Financial Discipline Product Portfolio
The proposed migration to Novo Mercado materializes the commitment to cultivate the highest standards of governance Equal political and economic rights: 1 share 1 vote and 100% tag along Creates conditions to continue improving and innovating Non-premium migration reinforces the commitment of controlling shareholders to the capital market and other stakeholders Liquidity gains contribute even more to position Suzano as protagonist in the reshaping of the industry in the long term Note: Novo Mercado is the highest corporate governance segment of the Brazilian Stock Exchange (B3). GAJAH ANNUAL REPORT 2015 11
Investor Relations www.suzano.com.br/ir ri@suzano.com.br