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FIBRIA APP WITH THIS PRESENTATION IS AVAILABLE FOR DOWNLOAD AT APPLE STORE AND GOOGLE PLAY.
UBS -Global Paper and Forest Products Conference September, 2015
2
The information contained in this presentation may include statements whichconstitute 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 ExchangeAct of 1934, as amended. Such forward-looking statements involve a certain degree ofrisk and uncertainty with respect to business, financial, trend, strategy and otherforecasts, and are based on assumptions, data or methods that, although consideredreasonable by the company at the time, may turn out to be incorrect or imprecise, ormay not be possible to realize. The company gives no assurance that expectationsdisclosed in this presentation will be confirmed. Prospective investors are cautionedthat any such forward-looking statements are not guarantees of future performanceand involve risks and uncertainties, and that actual results may differ materially fromthose in the forward-looking statements, due to a variety of factors, including, but notlimited to, the risks of international business and other risks referred to in thecompany’s filings with the CVM and SEC. The company does not undertake, andspecifically disclaims any obligation to update any forward-looking statements, whichspeak only for the date on which they are made.
Disclaimer
3
Company Overview1Pulp and Paper Market2Financial and Operational Highlights3
Agenda
Final Remarks4
4
Company Overview
5
A Winning Player
Port Terminal Pulp Unit
Três Lagoas
Santos
AracruzPortocel
Caravelas
BelmonteVeracel
Jacareí
Superior Asset Combination Main Figures – 2Q15 LTM
Pulp capacity million tons 5,300
Net revenues R$ billion 8.0
Total Forest Base(1) thousand hectares 967
Planted area(1) thousand hectares 563
Net Debt R$ billion 8.2
Net Debt/EBITDA (in Dollars)(2) X 1.95
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.
6
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
7
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)
Sales Mix by End Use - Fibria Highlights
Fibria’s Commercial Strategy
Net Revenues by Region - Fibria
Region - 2Q15 End Use - 2Q15
44% 44% 42% 37%43% 43%
35% 36%46% 42% 39% 40%
47% 42%
18%26% 26%
30% 22%29%
31% 31%19% 23% 27% 27% 17% 24%
29%20% 22% 25% 26%
21%25% 26% 26% 27% 24% 23% 26% 26%
9% 9% 10% 9% 10% 8% 9% 8% 10% 9% 10% 10% 10% 9%
1T12 2T12 3T12 4T12 1T13 2T13 3T13 4T13 1T14 2T14 3T14 4T14 1T15 2T15
Europe North America Asia Other
49%
36%
15%
Printing & Writing
Specialties
42%
24%
26%
8%
Europe
North
Asia
LatAm
Tissue
8
Pulp Supply Agreement: Puma Project
Logistics and commercial structure synergies;
Ensure sales volumes;
Ensure pulp market access with Klabin brand.
Logistics and commercial optimization and synergies;
Support customers’ growth and enhance customers’ needs;
Potential development of new customers.
▶ Agreement benefits:
Mutual value creation, with better servicing for both Companies customer’s base
▶ Pulp volumes:
• Minimum of 900 kt of hardwood for the first 4 years• 75% of 900 kt for the fifth year (phase out 1)• 50% of 900 kt for the sixth year (phase out 2)
▶ Selling price based on the average net price charged by Fibria at the Port of Paranaguá (FOB Paranaguá)
▶ Operational startup: Mar/2016
▶ Sales destination: Globally, except for South America
9
(1) Controlling group(2) Free Float 41.36% + Treasury 0.06%
Votorantim Industrial S.A. (1)
29.42%
BNDESParticipações (1)
29.16%
FreeFloat (2)
41.42%
• 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
• Indebtedness and Liquidity
• Market Risk Management
• Risk Management
• Corporate Governance
• Related Parties Transactions
• Anti-Corruption
• Information Disclosure
• Securities Trading
• Antitrust
• Genetically Modified Eucalyptus
Fiscal Council
Board of Directors
20% independent
members
Role of CEO and
chairman is split
Personnel and Remuneration
Committee
Statutory Audit
Committee
Finance Committee
Sustainability Committee
Innovation Committee
General Meeting
Listed on Novo Mercado, highest level at BM&FBovespa: Policies approved by the Board of Directors:
Shareholder Structure and Corporate Governance
30%
independent
members
100%
independent
members
50% independent members
45% independent members
-
10
Pulp and Paper Market
11
Expected scenario for 2013 in Nov’2012
BHKP CAPACITY CHANGES
Realized scenario in 2013
1,270
100
-155
-410
-140
-60
605
1,310
Eldorado
UPM Fray Bentos
Sappi Cloquet
Jari
Cellulose du Maroc
Sodra Tofte
Net
BEKP demand growth*
1,275
320
555
-155
-410
1,585
1,080
Eldorado
Suzano Maranhão
Montes del Plata
Sappi Cloquet
Jari
Net
BEKP demand growth*
DELAYED
UnexpectedClosures
In 2013, we stressed the difference between the expected scenarioand the realized one...
*Source: PPPC Outlook for Eucalyptus Market Pulp November 2012 *Source: PPPC Outlook for Eucalyptus Market Pulp September 2014
12
As a result we had better prices than expected
Consultants: Hawkins Wright, RISI and Brian McClay (published in the end 2012 for 2013 prices)
BHKP Delivered to Europe (USD/t)
765
772
767
784
772
788
814
795
770
791
740
750
760
770
780
790
800
810
820
1Q13 2Q13 3Q13 4Q13 Annual 2013
Consultants average for 2013 Realized PIX/FOEX price
13
BHKP CAPACITY CHANGES
The “better than expected scenario” happened again last year...
Realized scenario in 2014
1,770
-105
-85
-65
-120
-70
100
235
550
1,100
230
BEKP demand growth
Net
Ence Huelva
Old Town
APRIL Rizhao
Sodra Tofte
Sappi Cloquet
UPM
Oji Nantong*
Montes del Plata
Suzano Maranhão
Eldorado
1,7341,380
2,660
-120
-115
560
830
1,275
230
BEKP demand growth**
Net
Sodra Tofte
Sappi Cloquet
Oji Nantong*
Montes del Plata
Suzano Maranhão
Eldorado
Expected scenario for 2014 in Dec’13
More unexpected mill closures
*Partly integrated to existing PM**Source: PPPC Outlook for Eucalyptus Market Pulp November 2013
*Approved license only for 500,000 t/y
14
… and also better prices than initially projected
BHKP Delivered to Europe (USD/t)
782
737
696
718
733
768
752
729734
746
640
660
680
700
720
740
760
780
800
1Q14 2Q14 3Q14 4Q14 Annual 2014
Consultants average for 2014 Realized PIX/FOEX price
Consultants: Hawkins Wright, RISI and Brian McClay (published in the end 2013 for 2014 prices)
15
Then, what about 2015?
1005
-315
-65
115
85
30
200
750
265
750
400
BEKP demand growth**
Net
Possible closures*
Ence Huelva
April Rizhao
Sappi Cloquet
Old Town (Expera)
Portucel Cacia
Eldorado
CMPC Guaiba II
Oji Nantong
Montes del Plata
Suzano Maranhão
-400 to -800
1,415 to 1,815
Expected scenario for 2015 in Dec’14 Realized scenario in 2015
?
BHKP CAPACITY CHANGES
*Based on annual closures average (400,000 to 800,000 t/yr)**Source: PPPC Outlook for Eucalyptus Market Pulp September 2014
16
Shipments of Eucalyptus Pulp
(1) Source: PPPC World 20 – January/2015
Global Market BEKP Demand
Paper Capacity increase in China
2014 2015 Total
FORECAST REALIZEDPREVIOUS FORECAST
LATEST FORECAST
PREVIOUS LATEST
Woodfree 256 256 760 760 1,016 1,016
Tissue 1,390 1,278 727 1,365 2,117 2,643
Cartonboard 2,100 1,326 380 730 2,480 2,056
Total 3,746 2,860 1,867 2,855 5,613 5,715
Source: Fibria and Independent Consultants
790 kt
99 kt 130 kt319 kt 242 kt
10%
12% 4%
17%11%
Total NorthAmerica
WesternEurope
China Others
6M2015 vs. 6M2014(2)
(1) Source: PPPC World 20 – December/2014
2014 vs. 2013(1)
1,734 kt
92 kt
386 kt717 kt
537 kt
11%
5%
6%
20%13%
Total NorthAmerica
WesternEurope
China Others
(2) Source: PPPC World 20 – Jun/2015
17
Commodities Differentiation
China GDP breakdown
China commodity demand - basis 100
49% 49% 48% 49% 49% 50% 50% 50% 51% 51% 52%
44% 47% 48% 48% 48% 48% 48% 48% 47% 47% 46%
8% 4% 4% 3% 3% 2% 2% 2% 2% 2% 2%
2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015E 2016E 2017E 2018E
Consumption Investment Net Exports
2008A 2009A 2010A 2011A 2012A 2013A 2014A 2015E 2016E 2017E 2018E
Corn Soybeans Wheat Crude oil Iron ore Sugar BHKP
100
248
204190
166153
124120
Source: Itaú Macroeconomic Department and PPPC – May/15
18
Technical Age and Scale in the Market Pulp IndustryFurther closures are expected due to lack of adequate investments in the industry…
Hardwood (BHKP) Market Pulp Softwood (BSKP) Market Pulp
STRONGWeighted average
technical age 12.3 years
Weighted average
capacity 1,277,000 t/a
Aracruz
Três Lagoas
Veracel
Jacareí
0
500
1.000
1.500
2.000
2.500
3.000
051015202530
PM Capacity, 1000 t/a
Technical Age, years
WEAK
STRONGWeighted average
technical age 21 years
Weighted average
capacity 527,000 t/a
North American Pulp Mills Other Pulp Mills Closures Grade Switch On & Off
WEAK0
500
1.000
1.500
2.000
2.500
3.000
0102030
PM Capacity, 1000 t/a
Technical Age, years
More than 7.7 million tons of capacity above 25 years and with annual capacity below 500,000 t/y.
Old Town
EnceHuelva
19
Source: PPPC and Fibria
Closures of Hardwood Capacity Worldwide(000 ton)
Capacity closures DO happen
-910
-85
-1,260
-1,180
-540-500
-105
-1,085
-445
-750
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015-2017 E(1)
(1) As of April 2015
20
Gross capacity addition should not be counted as the only factorinfluencing pulp price volatility….(1)
List Price bottoming at US$650/t in 2011 and US$724/t in 2014
Cap
acit
y (0
00
to
n)
0,0
0,2
0,4
0,6
0,8
1,0
1,2
1,4
1,6
1,8
2,0
0
100
200
300
400
500
600
700
800
900
1.000
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Valdivia
APP Hainan
Veracel Nueva Aldea
Santa Fé
Mucuri
FrayBentos
KerinciPL3
Três Lagoas
Rizhao
APP Guangxi
ChenmingZhanjiang
EldoradoMontes del Plata
Maranhão
Guaíba II
APP South Sumatra(2)
Klabin
OjiNantong
Horizonte II
BH
KP
pri
ces
-C
IF E
uro
pe
(U
S$/t
on
)
(1) Source: Hawkins Wright , Poyry and Fibria Analysis. Pulp price estimates according to Hawkins Wright (Apr/15), Brian McClay (May/15) and RISI (Dec/14)(2) Partially integrated production
21
Lowest volatility among commodities
195
123
75
46
50
41
100 = January 1st, 2012
Source: Bloomberg – August 31st, 2015
Low volatility of hardwood pulp price, even though new capacities havecome on stream in the period.
25
35
45
55
65
75
85
95
105
115
125
135
145
155
165
175
185
195
205
Jan
-12
Feb
-12
Mar
-12
Ap
r-1
2
May
-12
Jun
-12
Jul-
12
Sep
-12
Oct
-12
No
v-1
2
De
c-1
2
Jan
-13
Feb
-13
Ap
r-1
3
May
-13
Jun
-13
Jul-
13
Au
g-1
3
Sep
-13
Oct
-13
De
c-1
3
Jan
-14
Feb
-14
Mar
-14
Ap
r-1
4
May
-14
Jun
-14
Au
g-1
4
Sep
-14
Oct
-14
No
v-1
4
De
c-1
4
Jan
-15
Mar
-15
Ap
r-1
5
May
-15
Jun
-15
Jul-
15
Au
g-1
5
Iron Ore Soy Bean Crude Oil Sugar BHKP Price (FOEX Europe) Exchange Rate (USD - BRL)
22
Brazilian macroeconomic data evolution
11 1115 13 10
-3 -6 -7 -7 -1 -1 3
13
25
34
45 4640
25 2520
30
19
2 -4 2
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Trade Balance - R$ billion
(1) From Jan/15 to Jun/15.
-8 -8 -8 -2
3 08
2 4
31
87
3
47 4959
19
-6
11
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Balance of Payments - R$ billion
(1)
23
Financial and Operational Highlights
24
Each 5% depreciation of the Real increases EBITDA by aroundR$403m (11%) and FCF by R$482 m (45%)
(1) Excludes Conpacel | (2) 2015 year end market consensus | (3) According to Focus Report (Brazilian Central Bank – August 28, 2015)
1,522
2,526
1,9642,253
2,796 2,791
3,682
2009(1) 2010(1) 2011 2012 2013 2014 LTM 2Q15 2015 E
Exchange Rate Average (R$/US$)
EBITDA Margin
EBITDA (R$ million)
Fibria net pulp price(US$/t)
Fibria net pulp price(R$/t)
2.00 1.76 1.67 1.95 2.15 2.35 2.69
3.23(3)
456
670 639 581
610 572 561 581
29%40% 34% 36% 40% 39% 46%
912
1,1791,067 1,133
1,311 1,344 1,509
1,877
Market Consensus(2)
25
559 583
35 27
12 5 ( 58 ) 3
2Q14 Wood FX Utilities Chemicals andEnergy
MaintenanceDowntimes
Others 2Q15
+ 4%
Cash Production Cost (R$/t) – 2Q15
Fibria Cash Production Cost (1) (R$/ton)
Consistently controlling the
production cash cost at a level below the inflation
pace.
26
Cash Production Cost saw a annual increase of 4.2% over the past 6 years
432448
471 473505 519 531
2009 (2) 2010 (2) 2011 2012 2013 2014 LTM 2Q15
CAGR: + 4.2%
(1) Constant Currency (2) Excludes Conpacel
27
Net Results (R$ million) – 2Q15
1,157
614
248
146 ( 54 )( 85 )
( 478 )
( 394 )
( 64 )
AdjustedEBITDA
FX Debt /MtM Debt
Hedge
MtMOperational
Hedge
HedgeSettlement
Net Interest Deprec.,amortiz. and
depletion
Income Taxes Others Net Income(Loss)
FX Debt
∆
deffered
∆
MtMhedge
∆
swap
ZCC
∆
(1) Includes non-recurring expenses/non-cash, other FX variation expenses and other financial income/expenses.
(1)
current
2Q15 2Q15
28
Free Cash Flow(1) – 2Q15
1,157
466
317
( 430 )( 93 )
( 128 )( 38 ) ( 2 )
( 149 )
Adjusted EBITDA Capex Interest(paid/received)
Working Capital Taxes Others Free Cash Flow Dividends Free Cash Flow(1)
R$ million
(2)
Evolution on return metrics ROE = 9.0% | ROE = 13.4%(3)
2Q14 2Q15
ROIC = 10.1% | ROIC = 13.9%
(1) Does not include non-recurring items. | (2) Not considering dividends payment. | (3) Cash basis. For detailed information,, see 2Q15 Results Earnings Release (page 17).
29
Indebtdeness
Net Debt (Million)
2.34
2.88
2.232.43 2.30 1.95
8,4579,352 9,015
3,840 2,915 2,906
Jun/14 Mar/15 Jun/15R$ US$
Gross Debt and Interest Expenses (Million)
6,681
8,991 8,197
3,033 2,803 2,642
Jun/14 Mar/15 Jun/15
R$ US$
Net Debt/EBITDA (US$)
Debt Amortization Schedule (US$ Million) Average Tenor (months) and Cost of Debt* in US$ (% p.a.)
5035 33
Interest (US$)
- 24%
Net Debt/EBITDA (R$)
(*) Considering the portion of debt in reais fully adjusted by the market swap curves at the endof each period.
52 54 52
Jun/14 Mar/15 Jun/15
3.5 3.5 3.6
- 35%
Cash on hand : US$ 470 million
264
554
818
186 213
350
447
626
369
9021 3
600
Liquidity 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Pre-payment BNDES ECN ACC/ACE Voto IV Bond
(cash)
(revolver)
30
Capital Structure: Fibria has achieved the lowest leverage ratio among its Latin American peers
Net Debt/EBITDA (x)(1)
Fibria Arauco CMPC Klabin Suzano
S&P BBB-/Stable BBB-/Stable BBB-/Stable BBB-/Negative BB+/Stable
Moody’s Ba1/Positive Baa3/Stable Baa3/Negative - Ba2+/Stable
Fitch BBB-/Stable BBB/Stable BBB+/Stable BBB-/Stable -
(1) Fibria’s historical data in BRL.
2.4 2.3
2.72.7 2.9 2.2
4.84.5 4.5
4.1
3.3
1.7 1.7
2.4
3.0
4.2 4.5
2.93.1
3.13.4
3.83.6 3.7 3.63.2
3.1 3.1
14.8
13.2
11.7 11.18.9 7.7
6.4
4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15
Fibria Suzano Klabin CMPC Arauco Eldorado
31
A consistent and disciplined approach focused on reducing debt and its cost
Debt (US$ million) x Leverage (US$) Interest (US$ million) x Cost of Debt (US$)
Free Cash Flow Increase
Interest Reduction
Cost of Debt Reduction
These dynamics creates a virtuous
cycle
(*) Considering the portion of debt in reais fully adjusted by the market swap curves of June. 30, 2015.
8.6
2.9
6.3
2.6
2009 2010 2011 2012 2013 2014 Jun/15
Gross Debt Net Debt
7.29
4.11 4.253.32
2.60 2.411.95
473414 408
350
268200
164
2009 2010 2011 2012 2013 2014 LTM2Q15
6.35.9
5.55.2
4.6
3.43.6(1)
32
Recent funding transactions
113 120140 143 150 160
175
215
COPEC Raizen Ecopetrol Fibria Colbun Braskem Molymet Argos USA
LatAm Investment Grade Loan Spread over Libor (bps)
CRA (Certificate of Agribusiness Receivables)
Reopening of the Syndicated Export Prepayment
Upsized Amount: US$400m
Book of US$515m
Average term: 5 years
Average Cost: Libor 3M + 1.43% p.a.
Amount: up to R$675m
Tenor: 6 years bullet
Coupon: max 102.5% CDI
Booking period: Sept/2015
Avg. Term(years) 4 5 5 5 6 5 5 5
33
One of the best performances among Brazilian corporate issuers(1)
(1) Gspread on August 5, 2015
269 286 302 307 308341 358
413
489
Globopar 2025 Brazil 2025 Fibria 2024 BRF 2024 Embraer 2023/25 Vale 2022 Klabin 2024 Samarco 2024 Gerdau 2024
34
Fibria has the simplest and most transparent call in the industry
Negative Neutral Positive
Pulp supply ✔
Closures/conversions ✔
Inefficient capacities in China ✔
Demand ✔
‣ Fiber and grade substitution ✔
‣ Tissue ✔
‣China ✔
Pulp price ✔
Brazil GDP ✔
Energy crisis ✔
FX ✔
Capex inflation ✔
Cost inflation ✔
Rating ✔
Tax ✔
Corporate Governance ✔
35
Final Remarks
36
Fibria is able to create value for its shareholders though capital discipline
INDUSTRY
CONSOLIDATION ?
PULP
Growth with discipline
Best portfolio of projects
DIVIDENDS
BIO-ENERGY AND
OTHER OPPORTUNITIES
Complementary to pulp
Portocel
Land and forest
FREE CASH FLOW
WITHOUT JEOPARDIZING CREDIT METRICS
37
Horizonte 2 Project
38
• Follow the growth of strategic customers
• Developing new customers
• Distribution to new geographic markets
• Efficiency and competitiveness gains in logistics
• Higher quality in customer service
• Greater ability to capture new expansion market windows
• Strong M&A position
Competitiveness
Commercial
positioning
Long-term growth
potential
What is the importance of growth for Fibria?
• Wider fixed costs dilution
• Cost curve position improvement
• Greater bargaining power with suppliers
39
Why expand Três Lagoas?
• Brownfield Project, synergies with current operations
• Modern plant, prepared for potential expansion
• Availability of wood and low average distance from forest to mill
• Forest based on the optionality concept and prioritizing lease and partnership models
• Additional energy surplus of 120 MWh
Start-up: 4Q2017
Capacity: 1.75 million tons
ESTIMATED BHKP CAPACITY RANKING 2017 (000T)
Source: Poyry and Fibria Analysis (as of May 2015)
0 2000 4000 6000 8000
Others
Klabin
Domtar
Pulp Mill Holding
Lwart
Portucel Soporcel
Georgia-Pacific
Resolute
Verso
Nippon Paper
Mondi
Oji
Mitsubishi
Marubeni
IP
Altri
ENCE
Cenibra
Arauco
Stora Enso
UPM
Eldorado
APP
Suzano
RGE/APRIL
CMPC
Fibria 7,950
Current Capacity
New Capacity
New Capacity – Klabin Agreement
New Capacity – Horizonte II Project
40
Pulp sales destination: Fibria growing where the market grows
(1) Considers 2Q15 last twelve months. | (2) Includes Klabin’s sales volume
37%
36%
42%
25%
19%24%
4%9%
Total sales volume distribution
after H2 start up(2)
Current sales volume distribution(1)
41
Window of opportunity for H2 project in 2017
Operating Rate not considering any project entering in 2017/2018 (theoretical scenario)
2015 2016 2017 2018 2019 2020 2021
New capacities (000 t) 2,208 2,150 2,300 2,300 900 2,100 1,700
Confirmed 2,208 2,150 2,050 800
Potential 250 1,500 900 2,100 1,700
Closures (000 t) (600) (600) (600) (600) (600) (600) (600)
Operating Rate considering H2
90.0%88.6%
90.3%
93.6%95.3% 94.0% 93.9%
2015 2016 2017 2018 2019 2020 2021
90.0% 88.6% 89.7% 89.5%91.1% 90.0% 90.0%
2015 2016 2017 2018 2019 2020 2021
Source: Fibria assumptions. Confirmed projects considers: Klabin Ortigueira, APP South Sumatra and Metsa Äänekoski
42
Schedule
Startup
Utilities clearance and commissioningL1 interconnections
during maintenancedowntime
Initial hiring of harvest workers
Hiring of operational team
Negotiations with concession holders and
Port of Santos tendering
2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17
2015 2016 2017
Beginning of infrastructure and
purchase of the TGs
Purchase of theindustrial plants
Beginning ofconstruction
Beginning ofassembly
Beginning of forest machinery deliveries
Beginning of harvest
Definition of outbound logistics formats
43
Forestry base
44
H2 Project will have the forest base ready for the start-up
Forestry base required:
H1: 120,000 ha
H2: 174,000 ha
Total: 294,000 ha
45
Logistics
46
Forestry LogisticsLow average distance from forest to mill
FOREST MILL
95 km
H1 + H2 consolidated
47
Outbound logisticsFibria has logistical alternatives on a competitive basis
Ports
Highways
Railroads
Waterways
Data Collection / Preliminary Analysis
Logistics Costs
Opex - Rates
Capex
Qualitative
Modal conditions
Analysis
Mato Grosso
Mato Grosso do
Sul
Goiás
Brasilia
48
Financials
49
Source: Hawkins Wright (Outlook for Market Pulp, July 2015) - FX considered by the consultant of R$/US$3.14.
H2 cash cost was estimated according to weighted average cost, after mill balance, converted by R$3.14. Includes energy sales.
Even more competitive cash production cost BHKP (US$/t)
457421
351 347
298 291
214170
155
China USA Iberia Canada Chile/Uruguay Indonesia Brazil Fibria 2Q15 LTM Fibria w/ H2
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Up to now, 70% of the expansion capex is committed
R$ MILLION
% Index
R$ 5,548 72Inflation
indices
EUR(1) 2,004 26 FX
USD(1)/SwedishKrona
154 2 FX
Total 7,7067 100
(1) Considering USD/BRL of 2.80 and EUR/BRL of 3.13, according to
budget.
Expansion Breakdown by currency(1) Expansion capex updated expected curve
7%
58%
30%
1% 4%
2015 2016 2017 2018 2019
onwards
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Funding for the H2 project Sources (estimated amounts in R$ billion)
(1) Cash on hand above minimum cash balance at end of Jun-2015
(2) Working capital to be released in 2016 and 2017 in commercial deal with Klabin
Even with expansion capex at current levels of FX, leverage ratios can continue to decrease
0.6
7.8
Q2 ExcessCash(1)
BNDES CRA FDCO ECAs Banks WorkingCapital(2)
Total
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Rating agencies understand that the Project will not jeopardize Fibria’s credit metrics
“We expect Fibria to continue benefiting from higher operating cash flows which
would allow it to enlarge its Três Lagoas industrial complex while keeping its debt at
reasonable levels for a low investment-grade rating”
“Fitch’s base case, which assumes that the company builds a new pulp mill (Três
Lagoas II) starting in 2015 and uses net pulp prices of between USD575 and USD675
per ton during the construction period, results in net leverage reaching 3.5x(1). Net
leverage would quickly decline to around 2.5x(1) once the mill becomes operationalin the second half of 2017”
(1) According to rating agency methodology
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Project financials at a glance
UNIT
Pulp production/year(1) k tons 1,750
Expansion capex(2) R$ billion 7.7
Sustaining capex(3) R$/t 193
Cash cost(4) R$/t 341
Energy surplus MWh 120
(2) Includes chemical leasing and investments in order to increase capacity to 1,850 kt/year.
(3) Estimated sustaining capex in perpetuity considering capacity of 1,850 kt/year.
(4) Estimated weighted average cost, after mill balance. Includes energy sales.
(1) Creep capacity will increase production to 1,850 kt/year
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Final Remarks
• Economies of scale
• Synergies with current operations
• Wood availability and low distance from forest to mill
• Fibria’s total energy surplus to be increased by 120 MWh
• Cash cost competitiveness
• Meet customers’ demand growth
• Attractive returns even in scenarios with appreciated BRL
• Solid financial profile