2. Disclaimer
Certain statements in this presentation may constitute forward-looking statements. Such statements are
subject to known and unknown risks and uncertainties that could cause the Company’s actual results to
differ materially from those set forth in the forward-looking statements. These risks include changes in
customer demand for the Company’s products, changes in raw material costs, seasonal fluctuations in
customer orders, pricing actions by competitors, significant changes in the applicable rates of exchange of
the Brazilian real against the US dollar, and general changes in the economic environment in Brazil,
emerging markets or internationally.
3. Agenda
Corporate Overview and Growth Cycle 04
Forestry Business Unit 14
Pulp Business Unit 20
Paper Business Unit 27
Results 34
4. Corporate Overview
Timeline
1924 until 1940 1950 1960 until 1990 2000 2024
Beginning of First investment in Growth and diversification in the Consolidation as one of the Suzano 2024
operations in the the pulp sector pulp and paper businesses largest Brazilian Groups
paper industry
Acquisition of Ripasa (50%) 2008
2010
Start up of Bahia Sul
2007
Acquisition of
Suzano mill New Growth Cycle
Beginning of paper
exports to Europe
Start up of the
first paper mill
2004
2005
1982
Pioneerism in 1992
eucalyptus plantation
1960
1975 Merger with Acquisition of
Leon Feffer Bahia Sul FuturaGene,
starts paper PLC.
trading activities
1956
Start up of Line 2
Launch of Report at Mucuri
1955 Acquisition of
Indústrias de Papel
Rio Verde’s control Adoption of Bovespa’s
1939 Level I corporate
Suzano Renewable
governance standards
Energy
and Professional
1924 Management
4
4
5. Growth Cycle
Suzano’s Strategy
Constant increases in forestry productivity guarantees competitiveness in
the pulp business and enables new business opportunities in Biotechnology
and Renewable Energy
Forestry
Competency
Operational Organic Wood pellets Biotechnology
excellence in growth
paper in pulp
5
6. Growth Cycle
Growth Strategy
Suzano reviewed its strategy and presents innovative growth plans supported by its
competencies and forestry know-how
Organic Growth in Pulp
Investimento em
Biotecnologia
Investment in Renewable Energy Renovável
Energia
Biotechnology
6
7. Growth Cycle
Organic Growth in Pulp
Suzano’s production capacity has increased by 130% in the last 5 years. The Company is
prepared for a new growth cycle that will increase its capacity to
5.6 MM ton/year of pulp and paper by 2014
Piauí Unit
Maranhão
Unit 5,650
4,250
2,750 2,850 2,850 2,850 2,850
1,920
1,720
1,485
1,240
Mucuri Unit and new pulp line: analysis of the global economy and pulp market outlook for definition of the
implementation schedule and start up.
7
8. Growth Cycle
New Units in Maranhão and Piauí
Projects:
Maranhão Piauí
• Market pulp production capacity:
Required planted area 154 tsd ha 170 tsd ha
1.5 MM ton/year per unit
• Estimated industrial capex: Forestry capex US$ 575 US$ 710
(total estimated) million million
US$ 2.3 billion per unit
Start up (estimative) 2013 2014
• Forestry capex already invested:
US$ 407 million 68% own land 70% own land
Wood supply 32% third 30% third
• Funding: parties parties
~ 80% debt and remainder cash flow generation
• BNDES and ECA’s1
• Competitive costs, long term and grace period
Competitive Advantages:
• 100 MW energy surplus per unit for sale
• Logistics guaranteed by long term contracts
• Projects’ updates with better returns
• Tax incentives Draft of Piauí’s nursery Draft of the MA / PI mill
1 Export Credit Agency
8
9. Growth Cycle
FuturaGene
• Acquisition concluded in July/2010
Biotechnology is on the right
• Pioneer in biotechnology research and development
side of Sustainability
• Sustainable technologies
Innovation
• Environmentally oriented to meet growing demand for fiber and
• Less land utilization
biomass
• Less water consumption
• Techniques for higher forestry productivity
• Less chemical expenditure
• R&D forestry synergies: competitive main factor in the pulp and
• Higher carbon sequestration
paper markets
9
10. Growth Cycle
Suzano Renewable Energy
Suzano Renewable Energy– 1st fase
Wood pellets for energy, produced from
• 3 units: 1 MM ton/year each
renewable energy-oriented forests
• Capex: US$ 800 million
• World leader
• Initial focus on the European market
• Analysis of the clones portfolio: special clone
selection
Experiments
• Dedicated plantation (more plants per hectare)
with
• Higher yield
“Energetic
Forests” • Harvest in 2 to 3 years
since 2008 • High lignin content – high calorific value
• Unuseful for pulp production
• Experimental “energetic” stewardship in Northeast
10
11. Growth Cycle
Renewable Energy Business Rationale
Internal View Transfer of Suzano’s pulp
• Competencies linked to the forestry business competitivity to the renewable
energy market
• Successful experiments with energetic forest
• Excellence in industrial projects’ management and Know How
High productivity based on forestry R&D
relations with suppliers (i.e: equipments, logistics,
etc) Time-to-market
“Energetic” stewardship - harvest in 2 to 3 years:
start up in 2013
Market View
Reliance
• Global focus in energy from renewable sources and Integrated forests, scale and strong cash generation
emission reduction
Environmental and social “Footprint”
• European challenges linked with future supply and Pellets: 100% from planted forests, with high
202020 targets environmental management standards
• Need for structured pellets suppliers and long-term Operations in the Brazilian Northeast, with relevant
contracts (big utilities) contributions to social development
11
12. Growth Cycle
Project Update
Concluded Steps Ongoing Steps
• Conceptual engineer • Commercial agreements: negotiation
• Technology definition of final contracts with clients
with suppliers - MoUs for 3.1 mm/ton/year
• Chemical properties • Search and negotiation of lands
aligned with the European market • Understandings with State governments
• Forestry Base: harvesting tests • Discussions with ship-owners and
• Dedicated team logistics providers
• Funding: definition of the capital structure (1Q11)
12
13. Agenda
Corporate View and Growth Cycle 04
Forestry Business Unit 14
Pulp Business Unit 20
Paper Business Unit 27
Results 34
14. Forestry Business Unit
Forestry Assets
The Forestry Business Unit (FBU) guarantees to Suzano
100% eucalyptus wood supply from renewable planted forests
2010 Areas’ Chart FBU in Numbers 2010
MA, PI and TO
Total area (tsd ha) 663
Total: 300 tsd ha
Planted: 77 tsd ha
Planted area (tsd ha) 290
Anual planting (tsd ha) 97
Planted saplings / day (tsd) 398
BA, ES and MG Harvested trees / day (tsd) 125
Total: 220 tsd ha
Anual harvest (million m³) 11.1
Planted:
126 tsd ha Loaded trucks / year
Forests 201
(tsd units)
average
distance: SP Preserved Area (tsd ha) 254
75 Km
Total: 143 tsd ha
Forests Planted: 87 tsd ha
average
distance: Suzano has developed forestry stewardship expertise and a complete genetic base for
246 Km
various scenarios due to its presence in different places with temperature, climate,
precipitation, soil, and relief variations.
14
15. Forestry Business Unit
Forestry Competitivity in Brazil
Brazil presents competitive advantages to support continuous increase of its global forestry standing
Competitive Advantages
• Availability of productive land
Leafy Productivity (m³/ha/year) • Excellent soil and climate conditions
• Short harvesting cycle for planted forests
• Regenaration potential of degraded areas
45.0 • Formation and maintenance low costs
41.0
25.0 • Continuously growing consumer market
20.0
13.0
6.0 4.0
Suzano’s Brazil Australia South Portugal USA Finland
Eucalyptus Africa
Source: ABRAF, BRACELPA, Adapted by STCP Consulting
• Logistics
Challenges
• Tax Structure
• Cost of Capital
• Education Level
• Exchange Rate
15
16. Forestry Business Unit
Suzano’s Forestry Competitivity
Suzano’s pioneerism and innovation enabled the development of stewardship techniques’ improvements and
formation of a genetic base
Competitive Advantages New Businesses
— Total clones: 14,729
• Genetic portfolio — Field experiments: 614
• Forestry technology — Total experimented area: 3,913 ha
• Management abilities
• Nutrition and soil research: potential to increase productivity
• Operational development: precision forestry (↑ efficiency)
• Forestry innovative concepts: “Night Planting” and “Energetic Forest”
Pulp Productivity • More wood / hectare
Biotechnology
11 admt1/ha/year • More pulp / m³
5,5 admt1/ha/year
• Superior quality
+100%
• Smaller area
1980 2010 • Decreasing costs / m³
Source: Suzano
1Admt: air dried metric ton
16
17. Forrestry Business Unit
Sustainability, Innovation and Governance
Sustainability Directive Plan considers a refined concept of theTriple Bottom Line
comprising Innovation and Governance
Economic financial
Governance
• Global competitiveness and scale Innovation
Application of • Consistent margins and returns • Processes, products
sustainability principles • Capital discipline and clean technologies
in the decision-making • Stakeholders’ knowledge
process valorization
Environment Social
• Forest management and certified • 57 public libraries
chain of custody
• Renovation of 35 public
• Member of CCX1 and WBCSD2 schools in 3 states
• ECOFUTURO (Parque das • ECOFUTURO: 92 thousand
Neblinas) benefited students
1 Chicago Climatic Exchange
2 World Business Council for Sustainable Development
17
18. Forestry Business Unit
Strategy
Operational Guarantee of Long-term view
Consolidation of
excellence: excellence research and
operations in the
focus on forestry Northeast: in new businesses development for
management and Maranhão and Piauí linked to forestry forestry
wood logistics competencies technologies
18
19. Agenda
Corporate View and Growth Cycle 04
Forestry Business Unit 14
Pulp Business Unit 20
Paper Business Unit 27
Results 34
20. Pulp Business Unit
Overview
Pulp and Paper Production Chain – 2010e 6% 3
2010e Production (MM ton) 51% 188 Others
72% 131
369 Recycled
8%
Integrated
Total fiber pulp 44% 22
consumption
49% 181
BSKP1
Minerals Virgin fiber
28% 50
8%
401 50% 25
Market pulp
Global production
of paper and (13% of total fibers) BHKP2
paperboard
401 64% 16
Market pulp still represents the smaller part of the
fiber used for paper production. BEKP3
Printing and Writing
New paper capacities are being installed near to
Millions of tons
Paperboard consumer markets, while cash costs drives 10% 1.6
Tissue implementation of new pulp capacities.
1 Bleached Softwood Kraft Pulp
Corrugated 2 Bleached Hardwood Kraft Pulp
3 Bleached Eucalyptus Kraft Pulp
Newsprint
Others
Suzano’s 2014 estimated
production of 4,6 mm ton
2010e (26% of global production)
Source: Poyry and Suzano
20
21. Pulp Business Unit
Pulp demand growth driven by eucalyptus and by European
and Chinese markets
Demand: Market Pulp (K ton) Demand: Eucalyptus Pulp (K ton)
CAGR CAGR
’03 -’09: ’03 -’09:
+2.2% +11.3%
55,755 19,710 20,560
54,555 18,580
53,215 17,405
15,715
51,610
49,085
10e
2010e 11e
2011e 12e
2012e 13e
2013e 14e
2014e 10e
2010e 11e
2011e 12e
2012e 13e
2013e 14e
2014e
Eucalyptus Pulp – China (K ton) Eucalyptus Pulp – Europe (K ton)
CAGR CAGR
’03 -’09: ’03 -’09:
+26.9% +7.4%
5,385 8,655
4,950 8,485
4,355
3,930 8,185
2,945
7,785
7,420
10e
2010e 11e
2011e 12e
2012e 13e
2013e 14e
2014e
2010e
10e 2011e
11e 2012e
12e 2013e
13e 2014e
14e
Source: PPPC
21
22. Pulp Business Unit
Supply increase driven by eucalyptus
shows Suzano as a relevant player
Market Pulp Supply (K ton) Eucalyptus Pulp Supply (K ton)
CAGR CAGR
’03 -’09: ’03 -’09:
+2.7% +11.3%
21,170 22,415
61,535 19,610
60,140 17,530 18,905
57,670 58,330
55,045
10e
2010e 11e
2011e 12e
2012e 13e
2013e 14e
2014e 10e
2010e 11e
2011e 12e
2012e 13e
2013e 14e
2014e
Eucalyptus’ Supply and Demand Balance (%) New Eucalyptus Pulp Capacities Forecast
2010 – 2014 (K ton)
Global 6,385 100%
Latin America 4,990 78%
95%
93%
92% 92%
Brazil 4,315 68%
90%
Suzano 3,000 47%
10e
2010e 11e
2011e 12e
2012e 13e
2013e 14e
2014e
Source: PPPC, Suzano
22
23. Pulp Business Unit
Brazilian Pulp Cash Cost: Structurally Low
US$ / ton (CIF/ North Europe)
US$ 511 - 696 / ton
US$ 441 - 651 / ton
700
US$ 367-398 / ton
600
Canada (British Columbia Coast)
500
Canada (British Columbia)
Canada (East)
France, Austria and Belgium
400 US$ 300 – 401 / ton
South Korea
France and Belgium
Japan
Sweden
Canada
USA
Finland
300
Iberia, Norway
Sweden
USA
China
Finland
Indonesia
Russia
Chile
Chile
Brazil
Hardwood Softwood
Source: Hawkins Wright, jul/ 10 - Volumes do not include production of unbleached pulp and high yield pulp.
23
24. Pulp Business Unit
Highlights
Pulp Sales Volume (K ton) Pulp Sales Destinations – 9M10
1,780 Brazil 18%
1,608
South/Central Am. 1% 33% Asia
1,320
1,195
North 9%
85%
799 82%
America
82% 82%
80%
18%
20% 18% 15% 18% Europe 39%
2007 2008 2009 LTM 9M10
Domestic Market Exports
Note: LTM = last 12 months
• Technical support in each international office:
Sales per Segment – 9M10
China, Switzerland and USA
• 80% of total sales with long term contracts Others 12%
• More than 150 active clients
41% Printing and Writing
• Strategic long-term partnerships with clients: Special 19%
• Logistics
• Technology
• Pre and post sale technical assistance Tissue 28%
• Strategic focus on high value added segments
24
25. Pulp Business Unit
Strategy
Focus on
Presence in Strategic
sustainable main
growth relationship with
international
strategy clients
markets
25
26. Agenda
Corporate View and Growth Cycle 04
Forestry Business Unit 14
Pulp Business Unit 20
Paper Business Unit 27
Results 34
27. Paper Business Unit
Global Paper Demand
Growth Premises
• Global paper demand growth (2010-2015) of 1.8% p.a.
• Printing and Writing: +0.9% p.a.
• Paperboard: +2.5 % p.a.
• Industry is still considered fragmented,
Global Paper Demand (MM ton)
but with significant regional concentration
CAGR 1.8% p.a.
• Emerging markets lead supply and demand growth
438
401
Suzano’s
Printing and Writing 121
116 Focus
Paperboard1
52
Tissue 46 33
29
210 232
Others
2010e 2015e
1 2
1Paperboard + liquid packaging board
Source: Poyry – 2009
27
28. Paper Business Unit
Demand Growth Drivers
Historically there is a high correlation between GDP per capita and paper consumption.
In Brazil, the positive economic growth forecasts represent an important driver for the domestic
paper demand.
Paper Consumption x GDP per Capita
USA • Education
Sweden
• Digital printing
Consumption (kg per capita)
Taiwan
Japan
Korea Rep.
• Electronic Media
UK • Plastics
China.
Spain
Brazil
GDP per Capita (US$)
Latin Am. and Brazil = 41kg USA = 300kg
Source: Poyry, 2008
28
29. Paper Business Unit
Brazil and Latin America are the main Markets
Brazilian Demand (MM ton) Latin Amercica ex-Brazil Demand (MM ton)
3.3% p.a. 5,287
4.3% p.a. 3,434
4,488
2,788 4.1% p.a. 1,875
4.2% p.a. 1,099
1,533
Paperboard1 895 Paperboard1
4.3% p.a. 2.9% p.a.
2,335 3,412
Printing & Writing2 1,893 Printing & Writing2 2,955
2010
2010e 2015
2015e 2010e
2010 2015e
2015
1Paperboard + liquid packaging board; 2 Uncoated + Coated
Source: RISI Latin America Forecast –Nov/10
• Economic growth, higher GDP and increased industrial activity
• Education level improvement and access to new technologies
• Latin America (ex-Brazil): net importing market
• Suzano’s competitive advantage:
- Geographic proximity and lower logistic costs
- Brand recognition
- Portfolio: wide range of products
29
30. Paper Business Unit
Highlights
Sales Volume (k ton) Sales Destination – 9M10
1,162 3% Others
1,125 1,116 1,146 Europe 11%
839
41% 43% 47% 44%
44% North 11% 56% Brazil
America
59% 57% 53% 56%
56%
2007 2008 2009 LTM 9M10 South/ Central Am. 19%
Domestic Market Exports
Note: LTM = last 12 months
• Leadership in printing & writing and white paperboard in South America
• More than 90% integrated production (pulp + paper)
• Fx hedge: approximately 60% of paper revenue in local currency
• 2 own paper merchants – SPP NEMO (2nd largest in Brazil) and Stenfar (Argentina)
• Premium pricing in the segments where we act
• Lower price volatility in the domestic market
30
31. Paper Business Unit
Price Recovery to Pre-Crisis Levels
Average Net Prices
Paperboard
140
134
Domestic Market
120
113 • Market dominance in high value added segments
Paperboard
100
• Low level presence of imports
80 • Growth of the consumer industry
60
Jan Jul Jan Jul Jan Jul Sep
08 08 09 09 10 10 10
140
Printing & Writing
Printing & Writing
120
111
100 102 Domestic Market
• Imports: high concentration of coated
80
• Exchange rate’s effects
60 • Fiscal control of Immune paper operations
Jan Jul Jan Jul Jan Jul Sep
08 08 09 09 10 10 10
Domestic Market Exports
Note: Prices of domestic market in R$; prices of exports in US$
31
32. Paper Business Unit
Strategy
Strengthening Products
Revenue Asset
of Distribution Portfolio
Management Optimization
Channels Management
32
33. Agenda
Corporate Overview and Growth Cycle 04
Forestry Business Unit 14
Pulp Business Unit 20
Paper Business Unit 27
Results 34
33
35. Results
Adequate Debt Amortization Schedule and Liquidity Profile
• Cash: R$ 3.6 billion on 09/30/2010
• Liquidity horizon: low rollover risk even under stress scenarios
• Competitive cost of debt and duration of 3.7 years
• Debt breakdown on 09/30/2010: 51% in foreign currency and 49% in local currency (R$)
• Moody’s: Baa3 (stable) Investment Grade; S&P: BB+ (stable)
Amortization schedule (R$ million) Debt - Sep/ 2010
R$ million Amount Leverage
1,951 BNDES 2,406 1.5x
Nordic Investment Bank 80 0.0x
1,390
1,230 FINIMP 311 0.2x
1,006 966
Projetcs Debt 2,797 1.7x
516 Trade Finance
417 2,258 1.4x
Debentures 784 0.5x
4Q10 2011 2012 2013 2014 2015 2016 Others 1,310 0.8x
onwards
Gross Debt 7,476 4.4x
Local Currency Foreign Currency
Cash and Cash Equivalents 3,617 2.2x
Net Debt 3,850 2.4x
35
35
36. Results
Conservative Financial Policy
• Benchmark: investment grade status
• Net Debt/ EBITDA ratios may increase temporarily due to growth projects
• Amortization in line with the projects’ cash flow
• Capex discipline
• Hedging for cash flow, not for accounting results
• No use of complex, illiquid or exotic derivatives
Implementation of World
Mucuri Project Start up of line economic
(line 2) 2 at Mucuri crisis
Acquisition
of Ripasa
3.8x 3.7x 3.7x
2.7x 3.9x
7,000 2.4x
6,000 1.6x 5,459
5,000 3,919 4,285 3,966 3,850 2.0
4,000 2,475
3,000 1,616
1,039 1,040 1,146 1,469 1,617
2,000 913 1,021
1,000
0 -3.0
2004 2005 2006 2007 2008 2009 LTM
Net Debt (R$ MM) EBITDA (R$ MM) Net Debt/EBITDA (x)
Note: The amounts of 2010 include the adjustments introduced by the IFRS standards
LTM = last 12 months
36
37. Results
Why to Invest in Suzano?
Defined Controlling
Group
2024
Biotechnology
Wood Pellets
Organic Growth in Pulp
Operational Excellence in Paper
Professional Capital
Management Markets
2010
+ Revenue
+ EBITDA
+ Earnings
+ Market Appreciation
1924
37
38. Investor Relations Team
Antonio Maciel (CEO and IR Director) +55 (11) 3503-9061 ri@suzano.com.br
Andrea Fernandes (IR Executive Manager) +55 (11) 3503-9062 afernandes@suzano.com.br
Fernanda Nardy (Analyst) +55 (11) 3503-9066 fnardy@suzano.com.br
Michelle Corda (Analyst) +55 (11) 3503-9359 mcorda@suzano.com.br
Rosely Onizuca (Analyst) +55 (11) 3503-9355 ronizuca@suzano.com.br
Áurea Portugal (Assistant) +55 (11) 3503-9061 aportugal@suzano.com.br
Eduardo Oliveira (Intern) +55 (11) 3503-9306 epoliveira@suzano.com.br
Investor Relations
www.suzano.com.br/ri
38