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December, 2014
Disclaimer
1
2 Pulp and Paper Market
3 Financial and Operational Highlights
4
Company Overview
Final Remarks
Agenda
Company Overview
4
A Winning Player
Superior Asset Combination
Belmonte
Veracel
Caravelas
Portocel
Aracruz
Trs Lagoas
Pulp capacity
million tons
5,300
Net revenues
R$ billion
7.0
thousand hectares
970
Planted area(1)
thousand hectares
562
R$ billion
7.3
2.5
2.7
Net Debt
Jacare
Santos
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.
* Veracel is a joint venture between Fibria (50%) and Stora Enso (50%) and the total capacity is 1,120 thousand ton/year
Highlights
Region - 3Q14
N.
America
26%
Tissue
55%
Printing &
Writing
27%
Europe
39%
Asia
25%
Specialty
18%
Other
10%
9%
22% 25%
14% 20%
37%
46% 41%
30%
46%
20%
9%
10%
8%
8%
8%
9%
9%
10%
20% 23% 25% 26% 21% 26% 26% 26% 27% 25%
31% 28%
35% 44%
42%
Worldwide presence
Long-term relationships
39%
46% 42%
4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14
North America
Europe
Asia
Other
Votorantim
Industrial S.A.
(1)
29.42%
BNDES
Participaes (1)
30.38%
Free
Float (2)
General
Meeting
40.20%
Fiscal
Council
Board of
Directors
20% independent
members
Role of CEO and
chairman is split
Finance
Committee
Statutory
Audit
Committee
Personnel and
Remuneration
Committee
Sustainability
Committee
Innovation
Committee
30%
independent
members
100%
independent
members
50% independent
members
45% independent
members
Risk Management
Corporate Governance
Anti-Corruption
Information Disclosure
Securities Trading
SOFTWOOD(1)
25.5 MT
2014-2016(2):
HARDWOOD(1)
31.1 MT
2014-2016(3):
MARKET PULP(1)
56.6 MT
2014-2016:
Net: 5.0 mt
Net: 5.3 mt
Net: 0.3 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 Vr (275kt)| Closures: Birla AV Terrace Bay (350kt)
(3) Projects included: Maranho (1.5mt); Montes del Plata (1.3 mt); Oji Nantong (700kt); Eldorado (200kt); CMPC Guaba II (1.3 mt); Klabin Ortigueira (1.0mt) | Closures: April Rizhao
(130kt); Arauco Valdivia (300kt); Old Town (200kt); Ence Huelva (400 kt).
10
15.000
10.000
5.000
Hardwood
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
Softwood
Source: PPPC
1998
15.0
2008
24.5
2018
32.8
Growth
19982008
63%
Growth
20082018
250
34%
150
200
6.0
14.2
23.4
137%
1000
900
800
100
Eucalyptus
1100
Spread Nov/14:
US$197
700
Average spread:
US$112
63%
600
50
Softwood
17.6
21.6
24.8
Market Pulp
32.6
46.1
57.1
23%
15%
500
400
Spread
Source: PPPC. Excludes Sulphite and UKP market pulp.
(1)
Average spread
BHKP
NBSK
11
MAIN PROJECTS
Project
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
Country
Capacity
Timing
Fiber
Status
CMPC Guaba II
Brazil
1.3 Mt
2Q2015
BEKP
Confirmed
Klabin Paran
Brazil
1.5 Mt
2Q2016
BEKP/
BSKP/Fluff
Confirmed
Indonesia
2.0 Mt
1Q2017
BHKP
Confirmed
Brazil
1.75 Mt
BEKP
Unconfirmed
2000
4000
6000
Cost position
of marginal
producer
12
1.000
900
1,8
1,6
Rizhao
Maranho
Trs
Lagoas
700
APP
Hainan
600
500
400
Eldorado
Montes
del Plata
1,4
Guaba II
Fray
Bentos
Mucuri
Veracel Nueva Aldea
Santa F
Valdivia
1,2
Klabin
1,0
Chenming
Zhanjiang
Kerinci
PL3
800
2,0
0,8
APP Guangxi
300
0,6
200
0,4
100
0,2
0,0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
(1) Source: Hawkins Wright , Poyry and Fibria Analysis. Pulp price estimates according to Hawkins Wright (Sep/14), Brian McClay (Nov/14) and RISI (Nov/14)
(2) Partially integrated production
13
3.000
Weighted average
technical age 12.3 years
STRONG
2.500
STRONG
2.500
Aracruz
2.000
1.500
2.000
Weighted average
capacity 1,277,000 t/a
Trs Lagoas
1.500
Jacare
1.000
Veracel
1.000
Weighted average
capacity 527,000 t/a
500
500
0
30
WEAK
20
10
0
30
WEAK
25
Closures
Grade Switch
20
15
10
Technical Age, years
On & Off
14
-105
-540
-500
-830
-910
-1,085
-1,180
-1,260
2006
2007
2008
2009
2010
2011
2012
2013
2014-2016 E
as of Oct14
15
30%
26%
25%
21%
16%
7%
Sugar
Iron Ore
WTI Crude
Oil
Soy
LME Metals
Ibovespa
Cattle
FOEX PIX
BHKP
Iron Ore
Crude Oil
Soy
LME
Metals
Ibovespa
Cattle
Pulp BHKP
-7%
-49%
-21%
-21%
28%
-5%
-7%
-22%
-17%
-21%
2%
7%
28%
7%|-3%
FIBR3|FBR
(1) Since 2009 | (2) Except Iron Ore (Average Vale, Rio Tinto and BHP) and LME Metals | (3) November, 26th
16
Capacity
(k tons):
1,775
660
595
570
1,570
1,045
2,415
335
625
3,745
340
1,010
3,950
7,450
5,300
Interest
71
46
69
41
86
121
34
38
24
41
142
48
498
508
456
468
420
404
424
424
406
342
55
38
67
315
311
297
= 31,385
Interest
Capex
Income Tax
SG&A
111
54
66
235
Positive Working
221 Capital: US$5/t
Delivery (US$/t)
Source: Hawkins Wright (Outlook for Market Pulp, September 2014) | Fibrias 3Q14 considering a FX of R$/US$2.27.
Gray bar includes cash expenses as Interest, CAPEX, SG&A and Taxes (Source: RISI and Fibria).
17
11%
23%
+1,400 kt
12%
6%
+185 kt
+844 kt
-37 kt
-1%
Total
(1)
25%
+674 kt
North America
Western Europe
Total
China
(1)
4%
5%
+60 kt
+255 kt
North
America
Western
Europe
12%
+680 kt
China
+403 kt
Other
2013
2014E
2015E
Total
P&W (woodfree)
385
150
576
1,111
Tissue
1,029
1,831
471
3,331
Cartonboard
2,128
1,616
180
3,958
Total
3,542
3,631
1,227
8,400
18
7.000
6.000
6.403
5.988
9M2013
9M2014
5.000
4.000
3.037
3.000
2.436
1.592
1.482 1.593 1.713
2.000
1.000
184 141
127 26
USA
Canada
47 13
0
BHKP Total
Latin
America
Indonesia
Other*
Western
Europe
(kg/person/year)
35
30
25
20
15
10
5
0
LTM Growth
Rate +4.2%
2.000
11
10
13
23
25
12
15
16
17
20
21
19
20
21
23
15
10
15
12
7
0
2005
2006
2007
2008
Eucalyptus
(1)
(2)
(3)
24
20
22
26
16
30
17
10
10
97
21
L.America
Asia FE
(Kg/capita/year)
23
14
12
4.000
22
E.Europe
China
(In percentage)
W.Europe
Japan
Africa
2009
2010
Hardwood
2011
Total
2012
2013
5
1
0
N.
West Japan Oceania East LatAm
America Europe
Europe
China
Africa
19
502
501
4
3Q13
Maintenance
Downtimes
18
( 23 )
Wood
Utilities
Other
3Q14
+ 0.2%
Energy sales and operational efficiency have contributed for cash production cost stability.
(Utilities: 3Q14: R$ 34/t I 2Q14: R$ 36/t I 3Q13: R$ 12/t)
21
Exchange Rate
Average (R$/US$)
2.00
1.76
670
912
660
1,067
676
627
40%
EBITDA Margin
639
581
2.10
610
572
2.50(3)
556
456
1,179
1.67
1.95
2.29
29%
34%
2,526
1,964
1,281
1,310
680
676
1,390
Market
Consensus
1,133
657
36%
40%
38%
2,796
2,708
2013
LTM 3Q14
2,253
1,522
EBITDA (R$ million)
2009 (1)
2010 (1)
2011
2012
2015
(1) Excludes Conpacel | (2) 2014 year end market consensus | (3) According to Focus Report (Brazilian Central Bank Oct/2014) | (4) According to Poyry full cost estimate - includes Manufacturing +
Delivered costs to Rotterdam + Depreciation + ROCE of 9%
22
Fibria delivers one of the highest EBITDA/t and FCF/t of the industry
Free cash flow generation - 3Q14 LTM (R$ Million)
2,708
317
(1,509)
Adjusted EBITDA
Capex
1,119
(370)
Interest
(paid/received)
Working Capital
(20)
(7)
Taxes
Other
507
59
(283)
Adjusted EBITDA
Capex
(69)
Interest
(paid/received)
Working Capital
210
(4)
(1)
Taxes
Other
(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.
23
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
4.5
3.7
3.6
3.1
3.6
2.9
3.1
2.4
1Q12
2Q12
3Q12
Fibria
4Q12
Suzano
1Q13
Klabin
2Q13
3Q13
4Q13
CMPC
1Q14
4.2
2.7
2.4
2.3
3.7
2.7
2.6
1.7
1.7
4Q11
11.1
2Q14
Arauco
3Q14
2014 2
Eldorado
Fibria
Arauco
CMPC
Klabin
Suzano
S&P
BB+/Positive
BBB-/Stable
BBB+/Negative
BBB-/Negative
BB/Stable
Moodys
Ba1/Positive
Baa3/Stable
Baa3/Negative
Ba2/Stable
Fitch
BBB-/Stable
BBB/Stable
BBB+/Stable
BBB-/Negative
BB/Stable
(1)
24
2,168
Land Deal
149
1,473
410
1,064
2014
1,441
1,255
834
829
450
299
384
2015
100
976
506
422
2,020
762
128
530
750
554
634
2016
2017
2018
2019
Foreign Currency
1,341
2020
2021
26
4-
2022
2023
Local Currency
September 2014
Cost of debt: 3.7%
Average maturity: 55 months
363
343
228
45
183
190
133
173
210
2014
2015
2016
552
513
217
181
425
56
335
332
369
251
73
178
2017
2018
2019
2020
Foreign Currency
208
56
153
2021
20
2022
2023
591
591
2024
Local Currency
25
But the initiatives have not finished. There are certain ongoing
negotiations that will improve Fibrias debt profile even further
Tranche A: L + 1.30% p.a.| 5 year term loan with the amortization starting at the end of year 4.
Cost reduction of 32.5 bps from our last comparable EPP.
Tranche C: L + 1.55% p.a. | 6-year Term Loan with the amortization starting on Jan/2020.
Average term increase of 1.5 years and cost reduction of 7.5 bps from our last comparable EPP.
627
(revolver)
2014
2015
2016
2017
Other
2018
ACC/ACE
2019
ECN
2020
BNDES
2021
Bond
EPP
2022
2023
2024
26
26
7.5
6.3
4.1
8.6
4.2
3.3
2.6
6.3
2.5
3.5
2009
2010
2011
Gross Debt
2012
2013
473
5.9
414
5.5
408
5.2
4.6
350
268
3.0
Sept/2014
2009
2010
2011
3.7
2012
2013
217
LTM 3T14
Net Debt
Interest
Reduction
Cost of Debt
Reduction
This dynamics
creates a virtuous
cycle
27
Issuance
Rating
Maturity
Volume
T-Spread
Coupon
X Book
2024
US$600 mn
275 bps
5.25%
11.5x
Braskem
Baa3/BBB-/BBB-
2024
US$500 mn
340 bps
6.45%
11.0x
Petrobras
Baa1/BBB/BBB
2024
US$2.5 bn
350 bps
6.28%
3.3x
Klabin
BBB-/BBB-
2024
US$500 mn
269 bps
5.25%
6.0x
Samarco
BBB-/BBB
2024
US$500 mn
288 bps
5.375%
3.6x
Fibria
Maturity
Volume
G-Spread
Yield
Fibria
2024
US$600 mn
289 bps
5.047%
Braskem
Baa3/BBB-/BBB-
2024
US$500 mn
362 bps
5.742%
BBB-/BBB-
2024
US$500 mn
332 bps
5.490%
Odebrecht
Baa3/BBB-/BBB
2023
US$800 mn (1)
297 bps
5.017%
Petrobras
Baa1/BBB/BBB
2024
US$2.5 bn
368 bps
5.817%
Baa3/BBB-/BBB-
2023
US$750 mn
308 bps
5.130%
BBB-/BBB
2024
US$ 500 mn
366 bps
5.848%
Klabin
Gerdau
Samarco
(1) Outstanding:
US$102 mn
28
CAGR: + 3.7%
505
432
2009 (2)
448
2010 (2)
471
473
2011
2012
2013
518
Consistently
controlling the
production cash
cost at a level
below the
inflation pace
3Q14 LTM
29
Fibria has the simplest and most transparent call in the industry
Negative
Pulp supply
Neutral
Positive
Tissue
China
Closures/conversions
Inefficient capacities in China
Demand
Fiber and grade substitution
Pulp price
Brazil GDP
Energy crisis
FX
Capex inflation
Tax
Corporate Governance
Cost inflation
Rating
30
Final Remarks
31
Fibria is seeking value creation for its shareholders with capital discipline
PULP
INDUSTRY
CONSOLIDATION ?
Potential
Growth
Prospects
BIO-ENERGY
OTHER OPPORTUNITIES
- Complementary to pulp
Portocel
- Ensyn
32
-21%
656
5,054
5,299
5,184
5,271
624
596
432
448
2009*
2010*
549
545
471
473
505
518
2011
2012
2013
3Q14 LTM
5,251
4,600
2009*
2010*
2011
2012
2013
3Q14 LTM
593
-28%
826
593
766
605
40%
678
584
29%
699
34%
2,526
649
648
Inflation Effect**
Historical Value
1,964
36%
40%
38%
2,796
2,708
2013
3Q14 LTM
2,253
1,522
2009*
2010*
2011
Historical Value
2012
2013
3Q14 LTM
2009*
2010*
2011
2012
Inflation Effect**
33
Key Highlights
34
Back up
35
3Q14 Results
Net Revenue (R$ million)
3Q13
1.334
1.345
1.372
1.271
1.841
2Q14
1.694
1.746
2Q14
3Q14
3Q14
Production
3Q13
Sales
41%
482 501
3Q13
559
486
2Q14
478 502
35%
35%
762
594
613
2Q14
3Q14
3Q14
Cash cost
3Q13
36
Indebtedness
Net Debt (Million)
3,0
63
2,7
2,3
2,9
Interest (US$)
9.487
8.240
3.033
Sep/13
Sep/13
Sep/14
R$
3,8
(revolver)
842
1.449
1.041
616
560
(cash)
2015
Pre-payment
2016
2017
BNDES
2018
ECN
2019
2020
ACC/ACE
US$
4,5
1.536
1.258
Sep/14
Early redemption
bond 2019
1.353
- 18%
3.498
Jun/14
US$
3.840
2.984
Jun/14
R$
2014
8.574
4.254
3.695
Liquidity
8.457
7.313
6.681
1.261
50
2,5
2,4
888
49
54
52
Sep/13
Jun/14
4,0
3,8
55
57
Sep/14
Dec/14
511
2021
49
2022
2023
Voto IV
2024
Bonds
37
Amount
Annual tax deduction:
R$85 million (tax)
Goodwill
(Aracruz
acquisition)
Forestry Capex in
Mato Grosso do
Sul state
Benefit
2018
Undefined
Amount
Tax loss
carryforward
Accumulated tax
credits
Balance Sept./2014:
-PIS/COFINS: R$556 million
-withholding tax (IR and CSLL):
R$604 million
-Befiex: R$537 million
2010
2011
2012
2013
LTM 3Q14
R$ 7 million
R$ 16 million
R$ 4 million
R$ 15 million
R$ 31 million
R$ 20 million
38
5.2
4.8
4.7
4.5
3.4
Dec/11
Mar/12
Jun/12
Sep/12
Dec/12
3.1
Mar/13
3.3
3.0
2.8
Jun/13
Sep/13
Dec/13
2.4
Mar/14
2.3
Jun/14
2.7
Set/14
Available
5,715
1,403
REFIS
1,625
2014 Bond
prepayment
1,851
2013 Bond
prepayment
1,045
2012 Bond
prepayment
836
850
1,361
EQUITY OFFERING
FCF 2012
(1) Losango and forestry assets and land in the south of Bahia State
LAND DEAL
FCF 2013
TOTAL
39
MAI* Pulp:
(adt/ha/year)
15.0
12.1
10.6
15.0
15.0
15.0
15.0
Conservative assumption
10.9
2010
2015
2020
2025
2030
2035
2040
2045
Actions:
Genetic improvement
Excellence in forestry management
Superior industrial efficiency
40
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%
40%
Integrated Mills
84 million t
Market Pulp
56 million t
51%
49%
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
(1)
29%
Fiber Consumption, Recycled Fiber and Pulp: RISI | Market Pulp, Hardwood and Eucalyptus: PPPC Special Research Note - May 2014
41
117,611
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
37,474
26,877
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
42
(1)
43
44