LatAm Commodities Conference - Itaú BBA October 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 Company 2 Pulp 3 Financial 4 Final Overview and Paper Market and Operational Highlights Remarks Agenda 3
Company Overview 4
A Winning Player Superior Asset Combination Main Figures 2Q14 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 555 Net Debt R$ billion 6.7 Net Debt/EBITDA (in Dollars) (2) X 2.4 Net Debt/EBITDA (in Reais) X 2.3 Port Terminal Pulp Unit Source: Fibria (1) Including 50% of Veracel, excluding forest partnership areas and forest bases linked to the sales of Losango and forest assets in Southern Bahia State. (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 Region - 2Q14 Europe 42% Other 9% N. America 22% Asia 27% Tissue 49% Sales Mix by Region - Fibria End Use - 2Q14 Specialty 18% Printing & Writing 33% 11% 9% 11% 10% 10% 10% 11% 10% 9% 10% 8% 8% 8% 9% 9% 22% 25% 14% 20% 31% 28% 20% 23% 25% 26% 21% 26% 26% 26% 27% Worldwide presence 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 Low dependence on volatile markets such as China Low credit risk 100% certified pulp (FSC and PEFC/Cerflor) 37% 46% 46% 41% 35% 44% 43% 41% 36% 42% 43% 35% 36% 46% 42% 30% 20% 29% 29% 24% 18% 26% 26% 30% 22% 28% 31% 30% 19% 22% 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 North America Europe Asia Other
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 ADR Level III program (1) Controlling group (2) Free Float 40.14% + Treasury 0.06% Policies approved by the Board of Directors: Indebtedness and Liquidity Market Risk Management Risk Management Corporate Governance Related Parties Transactions Anti-Corruption Information Disclosure Securities Trading 8
Pulp and Paper Market 9
10 Today, according to public information, there will be a 10% 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: (0.4) mt Net: 0.3 mt 2014-2016 (3) : New capacities: 6.0 mt Announced Closures: (1.0) mt Net: 5.0 mt 2014-2016: New capacities: 6.7 mt Announced Closures: (1.4) mt Net: 5.3 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); Arauco Valdivia (300kt); Old Town (200kt); Ence Huelva (400 kt).
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Global Market Pulp Demand Hardwood demand will continue to increase at a faster pace than Softwood Hardwood (BHKP) vs. Softwood (BSKP) (000 ton) Paper Production Runnability with BHKP 35.000 30.000 25.000 20.000 15.000 10.000 5.000 0 2013-2018 CAGR: Hardwood: +2.8% Softwood: +0.7% Source: PPPC Hardwood Softwood Source: RISI conference, August 2014. Demand growth rate NBSK vs. BHKP - Prices (1) 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 23.4 137% 63% 250 200 150 100 50 Spread Sep/14: US$ 206 Avg. Spread: US$ 104 1100 1000 900 800 700 600 500 Softwood 17.6 21.6 24.8 23% 15% 0 400 Market Pulp 32.6 46.1 57.1 Spread Avg. Spread BHKP NBSK Source: PPPC. Excludes Sulphite and UKP market pulp. (1) Source: FOEX Average spread in the last 5 years. 11
USD/Adt, 2013 cost level Supply structural changes puts pressure on the industry MARKET PULP CAPACITY RANKING 2014 (000T) MAIN PROJECTS Fibria APRIL Arauco Suzano Georgia Pacific CMPC UPM-Kymmene Stora Enso Paper Excellence Metsa Group Weyerhaeuser IP Ilim Sodra Mercer Domtar Resolute Forest Eldorado ENCE Canfor 0 2000 4000 6000 Project Country Capacity Timing Fiber Status 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 1Q2017 BHKP Confirmed Fibria Três Lagoas II Brazil 1.75 Mt - BEKP Unconfirmed COST CURVE EVOLUTION Cost position of marginal producer Bleached Softwood Kraft Pulp (BSKP) Bleached Hardwood Kraft Pulp (BHKP) Unbleached Kraft Pulp (UKP) Mechanical Pulp (MP) Cumulative Capacity Million t/a Source: Hawkins Wright, Poyry and Fibria Analysis (as of Aug. 2014). 12
BHKP prices - cif Europe (US$/ton) Greenfield capacity (000 ton) Gross capacity addition should not be counted as the only factor influencing pulp price volatility. (1) List Price bottoming at US$650/t in 2011 and US$724/t in 2014 1.000 APP South Sumatra (2) 2,0 900 1,8 800 Rizhao Maranhão 1,6 700 600 APP Hainan Fray Bentos Três Lagoas Eldorado Montes del Plata Guaíba II 1,4 1,2 500 Veracel Nueva Aldea Mucuri Klabin 1,0 400 Valdivia Santa Fé Kerinci PL3 Chenming Zhanjiang 0,8 300 APP Guangxi 0,6 200 Oji Nantong 0,4 100 0,2 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 0,0 (1) Source: Hawkins Wright, Poyry and Fibria Analysis (2) Partially integrated. 13
Technical Age and Scale in the Market Pulp Industry Further closures are expected due to lack of adequate investments in the industry 14 Hardwood (BHKP) Market Pulp Softwood (BSKP) Market Pulp 3.000 PM Capacity, 1000 t/a Weighted average technical age 12.3 years STRONG 3.000 PM Capacity, 1000 t/a Weighted average technical age 21 years STRONG 2.500 2.000 Aracruz 2.500 2.000 1.500 Weighted average capacity 1,277,000 t/a Jacareí Três Lagoas 1.500 1.000 500 Veracel 1.000 500 Weighted average capacity 527,000 t/a 0 30 WEAK 20 10 Technical Age, years 0 0 30 WEAK 25 20 15 10 Technical Age, years 5 0 North American Pulp Mills Other Pulp Mills Closures Grade Switch On & Off
15 Capacity closures DO happen Closures of Hardwood Capacity Worldwide (000 ton) -85-105 -540-500 -910-1,180-1,085-1,030-1,260 2006 2007 2008 2009 2010 2011 2012 2013 2014-2016E as of Sep14 Source: PPPC and Fibria
16 Lowest Volatility Among Commodities Commodities Historical Volatility (US$) (1) 38% 32% 30% 26% 25% 21% 26% 7% Sugar Iron Ore WTI Crude Oil Soy LME Metals Ibovespa Cattle FOEX PIX BHKP (1) Since 2009.
17 and when other expenses are plugged, we see no one but Fibria is generating positive free cash flow in the industry Total Cash Cost of BHKP delivered to Europe (US$/t) Capacity (k tons): 660 595 1,775 585 565 355 1,005 2,410 1,960 330 1,095 3,680 4,165 7,450 5,300 = 31,930 48 531 70 43 69 493 490 457 628 122 35 86 40 43 408 444 420 442 424 614 603 42 55 49 68 340 322 344 315 Interest 113 20 141 50 70 258 251 2Q14 net price: US$ 562/t Interest Capex SG&A Positive Working Capital: US$44/t Cash Cost (US$/t) Delivery (US$/t) Source: Hawkins Wright (Outlook for Market Pulp, July 2014) Fibria s 2Q14 considering a FX of R$/US$2.23. Gray bar include cash expenses as Interest, CAPEX, SG&A and Taxes.
18 Global Market BEKP Demand Shipments of Eucalyptus Pulp (1) 2013 vs. 2012 8M2014 vs. 8M2013 9% 23% 12% +674 kt 6% +185 kt +844 kt -37 kt -1% Total North America Western Europe China +944 kt Total 2% +24 kt North America 5% +212 kt Western Europe 26% +524 kt China 7% +185 kt Other (1) Source: PPPC World 20 December/2013 (1) Source: PPPC World 20 August/2014 Paper Capacity increase in China Ktons 2013 2014E 2015E Total P&W (woodfree) 385 150 576 1,111 Tissue 1,029 1,831 471 3,331 Cartonboard 2,128 1,616 180 3,958 Total 3,542 3,631 1,227 8,400
Benefiting From China s Growth 5.000 4.500 4.000 3.500 3.000 2.500 2.000 1.500 1.000 500 0 China s Hardwood Imports of BHKP by Country (1) ( 000s t) 4.453 4.682 BHKP Total 2.129 1.710 1.335 Latin America 7M2013 7M2014 1.206 1.202 1.126 * includes Russia, China, Thailand and New Zealand Latin America is the leading exporter of BHKP to China, accounting to approximately 45% of China's total imports in 7M2014. 148 112 105 20 Other* Indonesia USA Canada Western Europe 29 14 (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 (In percentage) 22 20 19 21 20 23 21 23 2005 2006 2007 2008 2009 2010 2011 2012 2013 Eucalyptus Hardwood Total (1) PPPC Pulp China (2) PPPC W20. Coverage for chemical market pulp is 80% of world capacity (3) RISI 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
Financial and Operational Highlights 20
No exposure eletricity shortage risks, in spite of which the company has benefited from the sale of its surplus energy 21 5 4 559 546 14 13 (27) 4 2Q13 Maintenance downtimes Wood FX Maintenance Utilities Others 2Q14 + 2.2% Utilities results boosted by energy sales. (2Q14: R$ 36/t I 1Q14: R$ 18/t I 2Q13: R$ 14/t)
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 2.30 Average Price FOEX (US$/t) 562 844 810 751 791 777 EBITDA Margin 29% 40% 34% 36% 40% 40% EBITDA (R$ million) 2,526 1,964 2,253 2,796 2,857 1,522 2009 (1) 2010 (1) 2011 (1) 2012 2013 2Q14 LTM (1) Excludes Conpacel 22
23 Fibria delivers one of the highest EBITDA/t and FCF/t of the industry Free cash flow generation (1) - 2Q14 LTM (R$ Million) 2,857 (1,409) (386) 111 (20) (28) 1,125 Adjusted EBITDA Capex Interest (paid/received) Working Capital Taxes Others Free Cash Flow ¹ Does not include asset sales, expenses on bonds repurchase, expenses related to the REFIS on subsidiaries profits abroad and tax credits from the BEFIEX program. Free Cash Flow per ton - 2Q14 LTM (R$/ton) 543 (268) (73) 21 (4) (5) 214 Adjusted EBITDA Capex Interest (paid/received) Working Capital Taxes Others Free Cash Flow
Capital Structure: Fibria has achieved the lowest leverage ratio among its Latin American peers Net Debt/EBITDA (x) (1) 14.8 13.2 11.7 4.8 4.5 3.6 3.7 2.9 3.1 4.0 3.8 3.2 2.4 2.3 2.6 2.4 1.7 1.7 4T11 1T12 2T12 3T12 4T12 1T13 2T13 3T13 4T13 1T14 2T14 2 2014 Fibria Suzano Klabin CMPC Arauco Eldorado 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/Stable (1) Fibria s historical data in BRL. (2) Market consensus. 24
Continuation of the liability management plan, also focusing on improving maturities 25 December 2013 Cost of debt: 4.6% Average maturity: 52 months 1,473 410 1,064 834 829 450 299 384 530 1,255 506 750 976 762 422 128 554 634 2,168 149 2,020 1,441 100 1,341 26 4- Land Deal Bond buyback: Fibria 2020, 2021 and VOTO IV Fibria 2024 issuance 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Bank loans renegotiations Foreign Currency Local Currency June 2014 Cost of debt: 3.8% Average maturity: 52 months 1,355 1,302 1,068 1,215 524 923 213 773 437 769 133 1,302 459 318 545 453 855 831 778 790 174 135 314 451 371 318 48 11 37 6 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Lower cost of debt Smoother debt amortization schedule NPV of all initiatives: US$270 million Foreign Currency Local Currency
But the initiatives have not finished. There are certain ongoing negotiations thar will improve Fibria s debt profile even further 26 Average Term From: 52 months to: 54 months Average Cost From: 3.8% to: 3.7% Revolver Cash R$1 billion Liquidity 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Others ACC/ACE ECN BNDES Bond Pre-payment
A consistent and disciplined approach focused on reducing debt and its cost 27 Gross Debt (million) x Leverage Interest (million) x Cost of Debt 6.3 14,985 3.6 4.8 3.4 2.8 2.3 6.3 946 5.9 5.5 5.2 4.6 3.8 8,606 8,457 3,840 473 528 230 2009 2010 2011 2012 2013 Jun/14 2009 2010 2011 2012 2013 2Q14LTM Debt (R$) Debt (US$) Leverage (x) Interest (R$) Interest (US$) Cost of Debt (%) Interest Reduction Free Cash Flow Increase Cost of Debt Reduction This dynamics creates a virtuous cycle
28 New issuance better priced than full IG issuers As of Sep 01, 2014 Rating Maturity Volume T-Spread Coupon Fibria Ba1 / BBB- / BB+ 2024 US$ 600 MM 275 bps 5.25% Braskem Baa3/BBB-/BBB- 2024 US$ 500 MM 340 bps 6.45% Petrobras Baa1/BBB/BBB 2024 US$ 2.5 bi 350 bps 6.28% BNDES Baa2/BBB-/ 2024 US$ 500 MM 362 bps 6.32% Klabin BBB-/BBB- 2024 US$ 500 MM 269 bps 5.25% Odebrecht Baa3/BBB/BBB 2029 US$ 500 MM 263 bps 5.25% Secondary Market Rating Maturity Volume T-Spread Yield Fibria Ba1 / BBB- / BB+ 2024 US$ 600 MM 277 bps 5.158% Braskem Baa3/BBB-/BBB- 2024 US$ 500 MM 300 bps 5.353% Klabin BBB-/BBB- 2024 US$ 500 MM 287 bps 5.289% Odebrecht Baa3/BBB-/BBB 2029 US$ 500 MM 251 bps 5.103% Petrobras Baa1/BBB/BBB 2024 US$ 2.5 bi 254 bps 4.908% Gerdau Baa3/BBB-/BBB- 2023 US$ 750 MM 260 bps 4.873%
Cash Production Cost saw a compounded average growth rate of 4% since 2009 Fibria Cash Production Cost (1) (R$/ton) CAGR: + 4% 432 448 471 473 505 554 Consistently controlling the production cash cost at a level below the inflation pace 2009 2010 2011 2012 2013 2014 YTD (1) Excludes Conpacel. 29
30 Maintenance CAPEX (R$ Million) 1,520 1,416 1,287 1,078 Approx. 18% increase 2011 2012 2013 Land Deal: Forestry Partnership Non recurring wood purchase Inflation FX Rate Modernization Others 2014E
31 Fibria has the simplest and most transparent call in the industry Negative Neutral Positive Pulp supply Closures/conversions Inefficient capacities in China Demand Mature markets China Pulp price Brazil GDP Energy crisis FX Capex inflation Cost inflation Rating Corporate Governance
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 The maturity of synergies captured since Fibria s creation improved its operating indicators PRODUCTION VOLUME (000 t) BEST PRACTICES AND OPERATING STABILITY +14% CASH COST (R$/ton) -21% 656 624 596 5,054 5,184 5,299 5,271 5.253 549 545 432 448 471 473 505 519 4,600 2009* 2010* 2011 2012 2013 2Q14 LTM SG&A (R$ million) STRUCTURE AND PROCESS SIMPLIFICATION 2009* 2010* 2011 2012 2013 2Q14 LTM Historical Value Inflation Effect** EBITDA (R$ million) - EBITDA MARGIN (%) -28% 900 826 766 678 699 593 593 605 584 648 645 29% 1,522 40% 2,526 34% 36% 1,964 2,253 40% 40% 2,796 2.857 2009* 2010* 2011 2012 2013 2Q14 LTM Historical Value Inflation Effect** 2009* 2010* 2011 2012 2013 2Q14 LTM * Excludes Conpacel ** IPCA index considered to calculate the inflation effect
35 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 36
2Q14 Results Pulp Production and Sales ( 000 t) Net Revenue (R$ million) 1,291 1,269 1,277 1,188 1,271 1,334 1,669 1,642 1,694 2Q13 1Q14 2Q14 Production Sales Cash Production Cost (R$/t) 2Q13 1Q14 2Q14 EBITDA (R$ million) and EBITDA Margin (%) 488 546 524 549 559 486 39% 41% 35% 647 679 594 2Q13 1Q14 2Q14 Cash cost ex-maintenance downtimes Cash Cost 2Q13 1Q14 2Q14 37
38 Indebtedness Net Debt (Million) Net Debt/EBITDA (R$) Net Debt/EBITDA (US$) Total Debt and Interest Expenses (Million) Interest (R$) 3.3 3.0 8.253 3.725 2.4 2.4 2.4 2.3 6.970 6.681 3.080 3.033 140 137 109 9.936 8.445 8.457 4.485 3.732 3.840 Jun/13 Mar/14 Jun/14 R$ US$ Debt Amortization Schedule (R$ million) Jun/13 Mar/14 Jun/14 R$ US$ Average Tenor (months) and Cost of US$ Debt (%p.a.) 3,243 4.7 1,467 (revolver) 4.1 3.8 1,776 (cash) 1,068 773 769 1,355 1,215 923 545 453 48 6 1,302 57 47 52 Liquidity 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Pre-payment BNDES ECN ACC/ACE Voto IV Bonds Jun/13 Mar/14 Jun/14
39 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 Jun/14: R$1,228 million (base) 2014 s tax deduction related to depletion: R$ 12,4 million (tax) 2018 Undefined Benefit Tax loss carryforward Accumulated tax credits Amount Balance up to Jun./14: R$385 million (base) Balance Jun./2014: -PIS/COFINS: R$535 million - withholding tax (IR and CSLL): R$242 million - Befiex : R$ 897,6 million Actual tax payment (cash basis) 2009 2010 2011 2012 2013 R$7 million R$16 million R$4 million R$15 million R$31 million
jan/02 jun/02 nov/02 abr/03 set/03 fev/04 jul/04 dez/04 mai/05 out/05 mar/06 ago/06 jan/07 jun/07 nov/07 abr/08 set/08 fev/09 jul/09 dez/09 mai/10 out/10 mar/11 ago/11 jan/12 jun/12 nov/12 abr/13 set/13 fev/14 jul/14 40 Real Exchange rate hasn t reflected domestic/foreign inflation diferential over time (Base 100 = Jan 2002) 250 217 200 150 100 94 50 0 + 2.2% IPCA BRL/USD
Liquidity Events: delivered as promised Net Debt/EBITDA (x) R$ 4.8 5.2 4.7 4.5 3.4 3.1 3.3 3.0 2.8 2.4 2.3 Dec/11 Mar/12 Jun/12 Sep/12 Dec/12 Mar/13 Jun/13 Sep/13 Dec/13 Mar/14 Jun/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 41
Due to productivity gains in its forests, Fibria had the opportunity to explore this new ownership model 42 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
43 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 44
45 China: 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.
Acknowledgments: Governance, Transparency, Profitability & Sustainability Valor 1000 Company of the year, among all industries, according to Valor Econômico. International Recognition by Corporate Governance Report Fibria is one of the 5 Brazilian companies nominees to the Best Corporate Governance Award from London. 2014 Institutional Investor Latam Ranking - P&P Sector Fibria was ranked for the fifth consecutive year (2010, 2011, 2012, 2013 and 2014). 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. 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. Época Negócios 360º Fibria was elected as 1st place in the pulp & paper sector in the corporate governance and future's vision categories 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. DJSI World and DJSI Emerging Markets RobecoSAM - Sustainability Investing Magazine Selected to Dow Jones World and Emerging Markets Sustainability Indices for 2014/15 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. 46