INSTITUTIONAL PRESENTATION NOVEMBER, 2015 KLBN11 KLBN11 / KLBAY
DISCLAIMER The statements contained in this presentation related to the business outlook, operating and financial projections, and growth prospects of Klabin S.A. are merely projections, and as such are based exclusively on the expectations of the Company s management concerning the future of the business. These forward-looking statements depend substantially on the market conditions, the performance of the Brazilian economy, the industry and international markets, and therefore are subject to change without prior notice. This presentation on Klabin s performance includes non-accounting and accounting data, such as operating and financial information, as well as projections based on Management s expectations. Note that the non-accounting data has not been reviewed by the Company s independent auditors. The Company s management believes EBITDA may provide useful information on the Company s operating performance and allow for comparisons with other companies in the same industry. Note however that EBITDA is not a measure established in accordance with generally accepted accounting principles of the International Financial Reporting Standards IFRS, and may be defined and calculated differently by other companies. 2
CONSISTENT GROWTH
Forestry Papers KLABIN TODAY 2 MILLION TONNES OF PAPER AND PACKAGING CAPACITY tsd hectares Total lands 490 Planted area 235 Pine 144 Eucaliptus 91 Native forests 255 tsd Total capacity 2020 Coated boards 750 Kraftliner 830 Sack kraft 210 Recycled 230 Conversion tsd Total capacity 810 Corrugated boxes 655 Industrial bags 155 4
FLEXIBLE PRODUCT LINE LEADER IN ALL SEGMENTS IN BRAZIL AND LINKED TO RESILIENT MARKETS COATED BOARDS market share KRAFTLINER installed capacity SALES VOLUME DESTINATION (9M15) PAPER AND PACKAGING 50% sole supplier of liquid packaging board in Latin America 40% 33% EXPORTS 30% OTHERS 50% 16% 67% DOMESTIC 70% FOOD MARKETS INDUSTRIAL BAGS market share CORRUGATED BOXES market share FLEXIBILITY AND RESILIENT MARKETS 5
adjusted EBITDA LTM - R$ KLABIN TODAY CONSISTENT PERFORMANCE 614 91 SALES VOLUME 1885 922 258 COST CUTTING PROGRAM MIX AND PRICE IMPROVEMENT BEST FORESTRY YIELD INDUSTRIAL EFFICIENCY PERFORMANCE IMPROVEMENT FLEXIBLE PRODUCT LINE JUN 2011 SEP 2015 6
PUMA PROJECT 7
LOW OPERATION COST ANNUAL PRODUCTION CAPACITY 1.5 MILLION TONNES OF PULP PUMA PROJECT PRODUCTION OF 270 MW of ENERGY SELF SUFFICIENT 1.1 MILLION TONNES OF SHORT FIBER 400 THOUSAND TONNES OF LONG FIBER PART CONVERTED TO FLUFF 120 MW FOR PUMA USE 150 MW FOR SALE IN THE MARKET 8
46% PUMA INDUSTRIAL CAPEX 14% TOTAL CAPEX R$ 7.2 BI national equipments and materials 14% imported equipments 27% INDUSTRIAL CAPEX R$ 5.8 BI NET OF RECOVERABLE TAXES engineering and other services civil construction and assembly PROJECT FULLY FUNDED 9
PUMA LOGISTICS MULTIMODAL 72 Km forestry average distance 441 Km railway to the port FORESTS PULP MILL PARANAGUÁ PORT INBOUND OUTBOUND 10
PUMA COMPETITIVENESS HARDWOOD 450 350 312 FOB US$/TONNE 200 PUMA 5 10 15 20 25 30 ANNUAL CAPACITY Source: Hawkins Wright April 2015 11
PUMA COMPETITIVENESS SOFTWOOD 418 445 472 337 FOB US$/TONNE PUMA 5 10 15 20 25 ANNUAL CAPACITY Source: Hawkins Wright April 2015 12
adjusted EBITDA LTM - R$ PREPARED TO GROW PAPER MACHINE 10 PAPER MACHINE 11 COST CUTTING MIX VOLUME PUMA PROJECT JUN 2011 CONSISTENT RESULTS SEP 2015 GROWTH PERSPECTIVES 2021 13
EARNINGS 3Q15
SALES VOLUME excluding wood tsd NET REVENUE R$ HIGHLIGHTS ADJUSTED EBITDA R$ 1,328 32% 1,334 33% 3,637 25% 4,092 30% 1,210 1,372 68% 67% 75% 70% 9M14 9M15 9M14 9M15 9M14 9M15 exports domestic market 15
471 thousand COATED BOARDS 42% +5% 491 thousand 42% 1,211 R$ PAPER BUSINESS UNIT 1,459 R$ KRAFTLINER (3) KRAFTLINER AND COATED BOARDS (1) RECYCLED (2) 300 thousand 65% 0% 300 thousand 69% KRAFTLINER 479 R$ 597 R$ 58% 58% 35% 31% 9M14 9M15 9M14 9M15 9M14 9M15 9M14 9M15 exports domestic market 16
CONVERSION MARKET POSITION CORRUGATED BOXES (7) CORRUGATED BOXES AND INDUSTRIAL BAGS (1) INDUSTRIAL BAGS (3) 1,627 R$ 1,665 R$ 536 thousand 514 thousand 9M14 9M15 + 9M14 9M15 17
CASH COST UNIT CASH COST CASH COST BREAKDOWN 3Q15 1,848 R$/tonne 2,021 R$/tonne Electricity Maintenance 9% materials / stoppage 10% Others 5% Labor / third parties 32% Fuel Oil 3% 3Q14 3Q15* Freight 12% Chemicals 14% Wood / Fibers 15% *Excluding non-recurring itens from other operating revenues and expenses 18
NET DEBT Gross Debt Cash Net Debt in 09/30/15 R$ 17.5 billion R$ 5.9 billion R$ 11.6 billion 19
CAPEX CAPEX R$ 2011 2012 2013 2014 2015E 2016E maintenance 3T14 296 3T14 390 3T14 369 3T14 384 3T14 405 3T14 567 special projects and growth 159 264 431 319 120 95 vale do corisco 428 - - - - - PUMA project - - 99 2,242 4,303 1,883 total 883 654 899 2,945 4,828 2,545 20
Investor Relations www.klabin.com.br/ir invest@klabin.com.br Phone: +55 (11) 3046-8401
APPENDIX PUMA MARKET FINANCIAL FIGURES
PUMA PULP MARKET
PULP MARKET 2014 112 164 mm t 52.6 VIRGIN FIBER PULP PULP MARKET DISTRIBUTION long fiber 45% 22% 33% eucalyptus integrated pulp market pulp other short fibers Source: Hawkins Wright; RISI 24
LARGEST MARKET PULP MILLS OF THE WORLD per year in 2014 Fibria Aracruz 2,340 PUMA: 6 th LARGEST PULP MILL April Riau 2,200 April Rizhao 1,700 WORLD DEMAND per year in 2014 CMPC Guaíba 1,690 Suzano Mucuri 1,565 Klabin 1,500 Suzano Maranhão 1,500 Eldorado 1,500 short fiber 28.6 17.5 52.6 market pulp Montes del Plata 1,300 eucalyptus Source: Hawkins Wright 25
4 th LARGEST IN FLUFF WORLD CAPACITY OF FLUFF thousand per year in 2014 GP Weyco IP Puma Klabin Domtar Resolute Stora Arauco Rock Tenn Rayonier UPM 400 334 290 255 250 170 110 100 Source: Hawkins Wright 1,045 1,420 2,296 the only designed to produce fluff from the start mills converted in fluff mills WORLD DEMAND per year in 2014 23.7 long fiber SBSK = pinus long fiber from USA 6.4 fluff and SBSK 26
FOCUS ON CONSUMER MARKETS MARKET PENETRATION IN DISPOSABLE DIAPERS 2013 SOPHISTICATION AND INNOVATION IN HIGHER VALUE ADDED PRODUCTS USA 96% high potential of growth BRA 50% ARG 72% Source: RISI, Euromonitor 27
BRAZIL IS THE 3 RD LARGEST MARKET OF DISPOSABLE DIAPERS IN THE WORLD SALES OF DIAPERS FOR ADULTS R$ billion 0.8 0.9 1.1 SALES OF DIAPERS FOR INFANT R$ billion 0.4 2009 0.5 2010 0.7 2011 2012 2013 2014 3.4 4.0 4.6 4.8 5.3 5.8 2009 2010 2011 2012 2013 2014 Source: Euromonitor 28
COMPOSITION OF DIAPERS 30% TO 50% OF THE AVERAGE WEIGHT OF A DIAPER IS COMPOSED OF FLUFF (20 TO 40G) 29
SPREADS AMONG DIFFERENT FIBERS CIF EUROPE US$/TONNE 235 fluff x short fiber 15 long fiber x short fiber jul 13 aug 13 sep 13 oct 13 nov 13 dec 13 jan 14 feb 14 mar 14 apr 14 may 14 jun 14 jul 14 aug 14 sep 14 oct 14 nov 14 dez 14 jan 15 feb 15 mar 15 apr 15 may 15 Source: RISI, FOEX 30
INCOME STATEMENT 3Q15/2Q15 3Q15/3Q14 9M14 9M15/9M14 (R$ thousands) 3Q15 2Q15 3Q14 9M15 Gross Revenue 1.719.529 1.593.961 1.540.725 8% 12% 4.868.571 4.381.858 11% Net Revenue 1.445.697 1.337.936 1.282.208 8% 13% 4.092.082 3.636.772 13% Change in fair value - biological assets 98.731 155.230 252.784-36% -61% 309.499 904.460-66% Cost of Products Sold (929.311) (1.058.415) (909.269) -12% 2% (2.917.793) (2.653.839) 10% Gross Profit 615.117 434.751 625.723 41% -2% 1.483.788 1.887.393-21% Selling Expenses (107.458) (105.594) (98.218) 2% 9% (307.513) (283.873) 8% General & Administrative Expenses (78.796) (82.927) (69.367) -5% 14% (236.687) (215.179) 10% Other Revenues (Expenses) (7.528) (9.912) 15.384-24% N/A (23.473) 41.800 N/A Total Operating Expenses (193.782) (198.433) (152.201) -2% 27% (567.673) (457.252) 24% Operating Income (before Fin. Results) 421.335 236.318 473.522 78% -11% 916.115 1.430.141-36% Equity pickup 10.707 5.804 23.032 84% -54% 24.046 34.381-30% Financial Expenses (235.507) (163.412) (226.856) 44% 4% (614.633) (429.961) 43% Financial Revenues 177.378 125.770 149.318 41% 19% 421.994 403.562 5% Net Foreign Exchange Losses (2.431.549) 239.104 (420.970) -1117% 478% (3.480.188) (168.823) 1961% Net Financial Revenues (2.489.678) 201.462 (498.508) N/A 399% (3.672.827) (195.222) 1781% Net Income before Taxes (2.057.636) 443.584 (1.954) N/A 105204% (2.732.666) 1.269.300 N/A Income Tax and Soc. Contrib. 716.803 (147.988) 8.963 N/A 7897% 958.863 (411.599) N/A Net income (1.340.833) 295.596 7.009 N/A N/A (1.773.803) 857.701 N/A - - - 0% 0% - - 0% Depreciation and amortization 185.980 293.985 222.366-37% -16% 730.281 656.749 11% Cost of carrying out assigned to property - land 977 7.453 - -87% N/A 8.430 - N/A Change in fair value of biological assets (98.731) (155.230) (252.784) -36% -61% (309.499) (904.460) -66% Vale do Corisco 10.047 8.719 8.326 15% 21% 26.933 27.264-1% Adjusted EBITDA 519.608 391.245 451.430 33% 15% 1.372.260 1.209.694 13% numbers in thousand R$ 31
BALANCE SHEET Assets Sep-15 Jun-15 Liabilities and Stockholders' Equity Sep-15 Jun-15 Current Assets 8.733.329 7.802.555 Current Liabilities 3.174.916 3.209.847 Cash and banks 41.727 39.881 Loans and financing 1.786.858 1.697.824 Short-term investments 5.328.822 4.678.747 Debentures 232.462 502.065 Securities 539.065 521.209 Suppliers 717.132 663.730 Receivables 1.376.085 1.240.197 Income tax and social contribution 0 0 Inventories 663.617 607.449 Taxes payable 50.241 36.253 Recoverble taxes and contributions 665.645 579.025 Salaries and payroll charges 206.313 165.491 Other receivables 118.368 136.047 Dividends to pay 0 0 REFIS Adherence 60.506 50.400 Noncurrent Assets 16.443.532 15.342.872 Other accounts payable 121.404 94.084 Long term Taxes to compensate 1.048.708 913.338 Noncurrent Liabilities 17.010.204 13.424.620 Judicial Deposits 81.564 84.426 Loans and financing 14.308.399 9.796.361 Other receivables 209.963 201.959 Debentures 1.196.629 1.387.647 Other investments 510.136 504.635 Deferred income tax and social contribution 706.916 1.428.556 Property, plant & equipment, net 11.042.867 10.096.021 Other accounts payable - Investors SCPs 139.179 136.445 Biological assets 3.537.696 3.531.080 REFIS Adherence 365.317 377.530 Intangible assets 12.598 11.413 Other accounts payable 293.764 298.081 Stockholders Equity 4.991.741 6.510.960 Capital 2.377.849 2.376.000 Capital reserve 1.299.181 1.301.030 Revaluation reserve 48.716 48.730 Profit reserve 342.555 1.879.743 Valuation adjustments to shareholders'equity 1.087.742 1.069.759 Treasury stock (164.302) (164.302) Total 25.176.861 23.145.427 Total 25.176.861 23.145.427 numbers in thousand R$ 32
LOAN MATURITY SCHEDULE R$ 1,765 2,440 2,405 1,642 1,535 2,237 1,665 2,563 1,522 2,397 2,182 Foreign Currency 11,793 920 1,484 1,004 Gross Debt 17,524 895 1,041 582 582 846 870 536 798 589 341 341 572 280 479 359 309 241 241 215 165 0 4Q15 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025/26 Local Currency 5,731 Local currency : R$ 5.7 billion Average tenor: 42 months Foreign currency: R$ 11.8 billion Average tenor : 54 months numbers in R$ 33