INSTITUTIONAL PRESENTATION MARCH 2015 KLBN11 KLBN11 / 1 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
A DIFFERENTIATED COMPANY 3
INTEGRATION AND MARKETS STRONGLY LINKED TO THE CONSUMER MARKET SALES VOLUME DESTINATION PAPER AND PACKAGING 13% other consumer goods 68% FOREST PULP PAPER and CONVERSION 243 thousand ha 1.7 million tonnes COATED BOARDS 750 thousand tonnes food 12% 220 thousand tonnes INDUSTRIAL BAGS AND SACK KRAFT others 7% building 330 thousand tonnes CORRUGATED BOXES AND KRAFTLINER 1.0 million tonnes EUCALYPTUS AND PINE FORESTS OLD CORRUGATED CONTAINERS 4
LEADER IN BRAZIL, WHERE WE ALLOCATE MORE THAN 50% OF OUR CAPACITY COATED BOARDS KRAFTLINER PAPER MARKET POSITION 50% market share 637 thousand tonnes sold in 2014 389 thousand tonnes sold in 2014 40% installed capacity sole supplier of liquid packaging board in Latin America 5
LEADER IN BRAZIL, WHERE WE ALLOCATE MORE THAN 95% OF OUR CAPACITY CONVERSION MARKET POSITION INDUSTRIAL BAGS CORRUGATED BOXES 50% market share 16% market share second player s market share is 16% second player s market share is 8% source: ABPO december 2013 6
RECENT IMPROVEMENTS IN EFFICIENCY COST REDUCTION AND CHANGE IN COMMERCIAL PRACTICES MONTE ALEGRE, PR OTACÍLIO COSTA, SC CORREIA PINTO, SC FORESTRY UNIT INSOURCING MECHANIZATION OF SILVICULTURE AND HARVESTING HIGH RETURN INVESTMENTS EXPANSION OF EVAPORATION SYSTEM OTACÍLIO COSTA AND MONTE ALEGRE BIOMASS BOILER OTACÍLIO COSTA AND CORREIA PINTO HIGH VOLTAGE TRANSMISSION LINE MONTE ALEGRE EXPANSION OF CONVERSION CAPACITY NEW CORRUGATOR JUNDIAÍ DISTR. IND, SP NEW CORRUGATOR GOIANA, PE NEW INDUSTRIAL BAGS EQUIPMENTS GOIANA, PE NEW PRINTERS FOR CORRUGATED BOXES 7
CAGR 16% 32% 34% 35% ADJUSTED EBITDA MARGIN 26% 26% 962 milllion R$ 1,028 million R$ 1,352 million R$ 1,562 million R$ 1,718 million R$ SALES VOLUME OF 1.7 MILLION TONNES PER YEAR (EXCLUDING WOOD) 2010 2011 2012 2013 2014 8
EXPANSION PROJECTS NEW CAPACITIES 2013 2014 2015 2016 SACK KRAFT MACHINE (SC) 80 thousand tonnes per year DEBOTTLENECKING COATED BOARDS (PR) 50 thousand tonnes per year DEBOTTLENECKING ANGATUBA (SP) 35 thousand tonnes per year RECYCLED PAPER MACHINE (PE) 110 thousand tonnes per year DEBOTTLENECKING PIRACICABA (SP) PUMA PROJECT 15 thousand tonnes per year 1.5 million tonnes per year COMPLETED CURRENT DEVELOPMENT 9
GROWTH PERSPECTIVES values excluding energy volume 3.5 mm tonnes energy fluff 1.8 mm tonnes 2.0 mm tonnes short fiber pulp conversion papers boards PAPER EXPANSIONS GOIANA ANGATUBA PIRACICABA conversion papers boards PUMA CONCLUSION conversion papers boards 2014 2015 2016 10
PUMA PROJECT 11
12
LOW OPERATION COST ANNUAL PRODUCTION CAPACITY 1.5 MILLION TONNES OF PULP 1.1 MILLION TONNES OF SHORT FIBER 400 THOUSAND TONNES OF LONG FIBER PART CONVERTED TO FLUFF PRODUCTION OF 270 MWh of ENERGY SELF SUFFICIENT 120 MWh FOR PUMA USE 150 MWh FOR SALE IN THE MARKET 13
LESS FORESTRY AREA NEEDED 300 thousand hectares Europe 700thousand hectares nordic countries 238 thousand hectares south USA PLANTED FOREST NEEDED FOR A 1.5 MILLION TONNES OF HARDWOOD PULP MILL 160 thousand hectares Chile 140 thousand hectares Brazil 100 thousand hectares HUGE KLABIN PUMA PRODUTIVITY 14
PARANÁ ORTIGUEIRA PUMA 23 Km MONTE ALEGRE MILL TELÊMACO BORBA IMBAÚ 15
CURRENT STATUS COMPLETION COST areas delivered to EPC s 100% of earthmoving concluded EPC s with Klabin coordination dedicated team: strong feedback and control 95% of equipment supplies, materials and services concluded lower dependency on imported equipments EUR 360 million (50% already paid) 45% 0% OF THE PROJECT COMPLETED 100% 34% 0% OF THE CAPEX DISBURSED 100% 16
46% 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 FUNDING FOR THE PROJECT CONTRACTED 17
PUMA LOGISTICS 18
LOGISTICS MULTIMODAL 72 Km forestry average distance 441 Km railway to the port FORESTS PULP MILL PARANAGUÁ PORT INBOUND OUTBOUND 19
RAIL 4 compositions of 71 wagons 4,544 tonnes every 42 hours 1,250 meters dimension of each composition 20
maneuver courtyard ALL WAREHOUSE IN KM 5 rail access static capacity of 70,000 tonnes warehouse Km 5 warehouse in port port Klabin owns the area warehouse in Km 5 warehouse will be ready for use in dec/15 21
WAREHOUSE IN THE PORT Klabin owns the area rail access Static capacity of 80,000 tonnes warehouse in the port direct connection to the primary port area Paranaguá port 22
PUMA PULP MARKET 23
PULP MARKET 2014 112 million tonnes 164 mm t 52.6 million tonnes VIRGIN FIBER PULP PULP MARKET DISTRIBUTION long fiber 45% 33% eucalyptus 22% integrated pulp market pulp other short fibers Source: Hawkins Wright; RISI 24
LARGEST MARKET PULP MILLS OF THE WORLD million tonnes per year in 2014 Fibria Aracruz 2,340 PUMA: 6 th LARGEST PULP MILL April Riau 2,200 April Rizhao 1,700 WORLD DEMAND million tonnes per year in 2014 CMPC Guaíba 1,690 Suzano Mucuri 1,565 Klabin 1,500 short fiber 28.6 17.5 52.6 market pulp Suzano Maranhão 1,500 Eldorado 1,500 Montes del Plata 1,300 eucalyptus Source: Hawkins Wright (jul/14) 25
4 th LARGEST IN FLUFF WORLD CAPACITY OF FLUFF thousand tonnes per year in 2014 GP Weyco IP Puma Klabin Domtar Resolute Stora Arauco Rock Tenn Rayonier UPM 110 100 170 400 334 290 255 250 Source: Hawkins Wright 1,045 1,420 the only designed to produce fluff from the start 2,296 mills converted in fluff mills WORLD DEMAND million tonnes per year in 2014 23,7 fibra longa 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 1.0 1.2 SALES OF DIAPERS FOR INFANT R$ billion 0.4 2008 0.5 2009 0.6 2010 2011 2012 2013 3.3 4.2 4.9 5.7 6.0 6.5 2008 2009 2010 2011 2012 2013 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 308 CIF EUROPE US$/TONNE fluff x short fiber 122 long fiber x short fiber may 13 jun 13 jul 13 aug 13 sep 13 oct 13 nov 13 dec 13 jan 14 feb 14 mar 14 apr 14 may 14 jun 14 jul 14 aug 14 sep 14 oct 14 nov 14 dez 14 Source: RISI, FOEX 30
GLOBAL CASH COST (SHORT FIBER) 600 500 CIF EUROPE US$/TONNE 400 PUMA 5 million tonnes 10 million tonnes 15 million tonnes 20 million tonnes 25 million tonnes ANNUAL CAPACITY Source: Hawkins Wright CIF: COST, INSURANCE AND FREIGHT INCLUDED 31
EARNINGS 2014 32
SALES VOLUME excluding wood tsd tonnes NET REVENUE R$ million HIGHLIGHTS ADJUSTED EBITDA R$ million 1,788 31% 1,771 31% 4,599 26% 4,894 25% 1,562 1,718 69% 69% 74% 75% 2013 2014 2013 2014 2013 2014 exports domestic market 33
COATED BOARDS PAPER BUSINESS UNIT KRAFTLINER (3) KRAFTLINER AND COATED BOARDS (1) RECYCLED (2) KRAFTLINER 675 thousand tonnes 44% 637 thousand tonnes 41% 1,608 million R$ 1,661 million R$ 377 thousand tonnes 58% 389 thousand tonnes 598 65% million R$ 639 million R$ 56% 59% 42% 35% 2013 2014 2013 2014 2013 2014 2013 2014 exports domestic market 34
CONVERSION MARKET POSITION CORRUGATED BOXES (7) CORRUGATED BOXES AND INDUSTRIAL BAGS (1) INDUSTRIAL BAGS (3) 2,017 million R$ 2,171 million R$ 693 thousand tonnes 712 thousand tonnes 2013 2014 + 2013 2014 35
UNIT CASH COST 1,689 R$/tonne 1,778 R$/tonne 1,719 R$/tonne 1,830 R$/tonne 4T13 4T14* 2013 2014* *Excluding non-recurring effects 36
NET DEBT NET DEBT/EBITDA (LTM) 2.4x 2.5x 2.3x 2.5x 2.4x 2.5x 2.2x 2.4x 2.4x 2.6x 1.7x 1.7x 2.4x 3.0x 5,242 NET DEBT R$ million 2,313 2,735 2,674 3,014 3,090 3,278 3,136 3,437 3,595 3,985 2,711 2,824 4,028 sep/11 dec/11 mar/12 jun/12 sep/12 dec/12 mar/13 jun/13 sep/13 dec/13 mar/14 jun/14 sep/14 dec/14 37
FIN. AGREEMENTS 2014 R$ million Local Currency Annual interest rate - % Current Debentures Mandatorily Convertible 2 Noncurrent Total 8.0 + USD + Share of Profits 254 293 547 BNDES - Debentures IPCA + 2.5 to 7.25 22 777 798 BNDES Project PUMA TJLP + 2.5 2 200 202 BNDES - Project MA1100 TJLP + 4.5 and basket 1 + 1.5 297 38 335 FINAME 2.5 to 4.5 72 315 387 BNDES - Other TJLP + 4.5 and basket 1 + 1.5 172 652 824 Export credit notes CDI + 0.6 37 781 818 Other 1.0 to 6.8 127 92 219 Foreign Currency (USD) 983 3,148 4,131 BNDES Project PUMA USD + 6.6 2 181 183 BNDES - Other USD + 5.7 to 6.3 31 191 222 Bonds (Notes) USD + 5.25 32 1,328 1,36 Export credit notes USD + 3.9 to 8.1 155 1,127 1,282 USD + Libor 6M + 1.0 to Export payments 6.4 537 3,256 3,793 Others USD + 1.9 14-14 771 6,083 6,854 Total 1,754 9,231 10,985 MATURITY SCHEDULE 2014 R$ million 1.755 772 983 1.055 585 1.421 971 470 450 1.454 894 560 DEBT PROFILE 1.193 897 296 1.407 673 734 613 398 483 241 215 242 190 70 120 62 38 1.413 1.351 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Foreign currency: R$ 6.9 billion Average tenor : 57 months Local currency : R$ 4.1 billion Average tenor: 45 months
CAPEX CAPEX R$ million 2011 2012 2013 2014 2015E maintenance 3T14 296 3T14 390 3T14 369 3T14 384 3T14 350 special projects and growth 159 264 431 319 385 vale do corisco 428 - - - - PUMA project - - 99 2,242 3,437 total 883 654 899 2,945 4,172 39
Investor Relations www.klabin.com.br/ir invest@klabin.com.br Phone: +55 (11) 3046-8401 40
APPENDIX 41
INCOME STATEMENT (R$ thousand) 4Q14 3Q14 4Q13 2014 2013 4Q14/3Q14 4Q14/4Q13 2014/2013 Gross Revenue 1,518,233 1,540,725 1,485,726-1% 2% 5,900,091 5,554,345 6% Net Revenue 1,257,110 1,282,208 1,236,221-2% 2% 4,893,882 4,599,337 6% Change in fair value - biological assets 19,644 252,784 56,362-92% -65% 924,104 336,289 175% Cost of Products Sold (919,770) (909,269) (845,033) 1% 9% (3,573,609) (3,206,917) 11% Gross Profit 356,984 625,723 447,550-43% -20% 2,244,377 1,728,709 30% Selling Expenses (95,853) (98,218) (96,777) -2% -1% (379,726) (362,638) 5% General & Administrative Expenses (83,171) (69,367) (76,666) 20% 8% (298,350) (280,526) 6% Other Revenues (Expenses) 42,985 15,384 (1,342) 179% N/A 84,785 11,472 639% Total Operating Expenses (136,039) (152,201) (174,785) -11% -22% (593,291) (631,692) -6% Operating Income (before Fin. Results) 220,945 473,522 272,765-53% -19% 1,651,086 1,097,017 51% Equity pickup 14,268 23,032 4,860-38% 194% 48,649 22,235 119% Financial Expenses (224,971) (226,856) (119,667) -1% 88% (654,932) (423,350) 55% Financial Revenues 131,778 149,318 64,803-12% 103% 535,340 212,957 151% Net Foreign Exchange Losses (357,697) (420,970) (193,655) -15% 85% (526,520) (528,641) 0% Net Financial Revenues (450,890) (498,508) (248,519) -10% 81% (646,112) (739,034) -13% Net Income before Taxes (215,677) (1,954) 29,106 10938% N/A 1,053,623 380,218 177% Income Tax and Soc. Contrib. 88,306 8,963 (7,586) 885% N/A (323,293) (90,121) 259% Net income (127,371) 7,009 21,520 N/A N/A 730,330 290,097 152% Depreciation and amortization 295,216 222,366 216,749 33% 36% 951,965 766,553 24% Cost of carrying out assigned to property - land 3,169 - - N/A N/A 3,169 - N/A Change in fair value of biological assets (19,644) (252,784) (56,362) -92% -65% (924,104) (336,289) 175% Vale do Corisco 8,708 8,326 9,330 5% -7% 35,972 34,400 5% Adjusted EBITDA 508,394 451,430 442,482 13% 15% 1,718,088 1,561,681 10% numbers in thousand R$ 42
BALANCE SHEET Assets dec-14 dez-13 Liabilities and Stockholders' Equity dec-14 dez-13 Current Assets 7,899,676 4,826,148 Current Liabilities 2,518,873 1,779,513 Cash and banks 400,684 130,836 Loans and financing 1,479,788 1,124,976 Short-term investments 4,845,149 2,599,036 Debentures 275,201 0 Securities 497,604 249,511 Suppliers 438,864 345,384 Receivables 1,148,676 1,145,154 Income tax and social contribution 0 18,209 Inventories 563,709 495,852 Taxes payable 55,137 43,298 Recoverble taxes and contributions 331,968 120,050 Salaries and payroll charges 139,879 127,356 Other receivables 111,886 85,709 REFIS Adherence 50,400 50,400 Other accounts payable 79,604 69,890 Noncurrent Assets 13,274,179 10,093,348 Long term Noncurrent Liabilities 11,596,659 7,747,316 Taxes to compensate 428,884 123,684 Loans and financing 8,160,320 5,838,621 Judicial Deposits 84,689 90,969 Debentures 1,070,263 0 Other receivables 236,050 171,322 Deferred income tax and social contribution 1,699,823 1,220,187 Other investments 494,747 466,581 Other accounts payable - Investors SCPs 131,526 125,767 Property, plant & equipment, net 8,351,387 5,909,507 REFIS Adherence 384,607 393,492 Biological assets 3,667,085 3,321,985 Other accounts payable 150,120 169,249 Intangible assets 11,337 9,300 Stockholders Equity 7,058,323 5,392,667 Capital 2,271,500 2,271,500 Capital reserve 1,295,919 4,419 Revaluation reserve 48,767 49,269 Profit reserve 2,534,302 2,159,949 Valuation adjustments to shareholders'equity 1,065,446 1,065,437 Treasury stock (157,611) (157,907) Total 21,173,855 14,919,496 Total 21,173,855 14,919,496 numbers in thousand R$ 43