2. 3Q10 Highlights – Pulp and Paper Markets
• Global market pulp production of 10.8 MMt in 3Q10: +9.2% vs. 2Q10 and +5.7% vs. 3Q09
• Global pulp sales volume: (MMt)
3Q10 3Q10 x 2Q10 3Q10 x 3Q09
Market Pulp: 10.1 +0.8% -4.9%
Pulp
Eucalyptus: 3.4 -0.2% -6.5%
• Global inventories at 32 days1 (Sep/10): below the historical average of 33 days
• Price decreases in 3Q10: US$ 870/ton (September, CIF Europe)
• Market pulp shipments to China in September:
Market pulp: 685 thousand tons (+72.1% vs. Aug/10 and + 46.7% vs. Jul/10)
Eucalyptus: 198 thousand tons (+98.0% vs. Aug/10 and +21.5% vs. Jul/10)
• Domestic demand2: growth post-crisis recovery
3Q10 3Q10 x 2Q10 3Q10 x 3Q09
Printing & Writing 528.6 +15.5% +6.3%
Paperboard 166.7 +8.4% +10.8%
Paper
• Increase of P&W paper imports in the domestic market (25.4% vs. 23.4% in 2Q10)
• Brazilian exports accounted for 34.3% of total sales compared to 40.0% in 2Q10
• Recovery of the main P&W markets in 3Q103 vs. 3Q09:
Western Europe: -2.6% vs. 2Q10 and +7.6% vs. 3Q09
North America: -0.1% vs. 2Q10 and +4.1% vs. 3Q09
1PPPC 2Bracepla 3RISI
02/09
3. 3Q10 Highlights - Suzano
• Total market pulp and paper production of 680 thousand tons
• Sales volume of 675 ktons: 390 ktons of pulp and 285 ktons of paper
• Net revenue of R$1.2 billion
• Pulp production cash cost of R$458/ton1
• EBITDA of R$ 408 million, with EBITDA margin of 35.2%
• Net income of R$273 million
• Net debt / EBITDA ratio of 2.4x. Cash and cash equivalents of R$ 3.6 billion and
net debt of R$ 7.5 billion in September/10
• Reduction of US$ 50/ton in pulp prices in August and maintenance of prices in
September and October.
• New increases in paper prices in both domestic and export markets
• US$ 650 million raised through notes rated Baa3 (Investment Grade, Moody’s) and BB+
(Standard & Poor’s).
1 Excluding maintenance downtime costs 03/09
4. Pulp Business Unit
• Sales: 389.5 thousand tons in 3Q10:
7.3% lower than 2Q10
2.4% lower than 3Q09
• Average net price in 3Q10 (domestic and exports) of US$ 748.1/ton, +0.9% vs.2Q10. In R$:
1.5% lower than 2Q10
50.3% higher than 3Q09
• Net revenue of R$ 509.7 million.
8.8% lower than 2Q10
46.7% higher than 3Q09
Pulp Sales (ktons) Pulp Sales Destination
3Q10 2Q10
389.5 thousand tons 420.2 thousand tons
04/09
5. Paper Business Unit
• Sales volume of 285.4 thousand tons in 3Q10:
3Q10 x 2Q10 3Q10 x 3Q09
Printing & Writing -3.5% +10.0%
Paperboard -5.2% +5.2%
Average paper price (domestic) +3.7% +4.7%
• Domestic sales: 61.6% of total sales in 3Q10
• Exports average net price:
3Q10 x 2Q10 3Q10 x 3Q09
In US$ +9.5% +25.8%
In R$ +6.9% +17.9%
Paper Sales (ktons) Paper Sales Destination
3Q10 2Q10
285.4 thousand tons 296.9 thousand tons
05/09
6. Operational Performance
Highlights • Higher share of paper in Suzano’s revenue:
56% in 3Q10 vs. 53% in 2Q10
• Pulp cash cost ¹ 1.3% lower than 2Q10:
Lower costs related to wood from third
parties
Lower chemicals cost
Higher fixed cost
• EBITDA margin of 35.2%:
0.5 p.p. higher than 2Q10
No non-recurring items in 3Q10
Pulp cash cost¹ (R$/ton) Net Revenue Breakdown
1 Mucuri Unit 06/09
7. Debt and leverage
1
Debt Breakdown - R$ Million September-10 June-10 September-09
Gross Debt 7.476 6.427 6.611
(-) Cash and Cash Equivalents -3.625 -2.544 -2.447
Net Debt 3.850 3.883 4.164
Net Debt / EBITDA 2,4x 2,7x 3,6x
1All amounts in the table above include the adjustments introduced by the IFRS standards. 07/09
8. Key Messages
• Demand recovery in pulp and paper markets:
Paper: new price hikes and bigger domestic sales in the sales mix
Pulp: sales volume recovery in Sep/10 in China and global inventories below the historical
average
• Operational margins recovery
• Solid financial position
Adequate debt profile and competitive debt cost
Leverage reduction: from 2.7x in Jun/10 to 2.4x in Sep/10
US$ 650 million raised through notes rated Baa3 (Investment Grade, Moody’s) and BB+
(Standard & Poor’s).
• Consistent growth strategy
Evolution in Maranhão and Piauí projects:
− Obtained prior license of Maranhão’s industrial facility
Acquisition of FuturaGene concluded, by the amount of US$ 84 million
08/09