Brazil Santander Credit Conference 2015

April, 2015

FIBRIA APP WITH THIS PRESENTATION IS AVAILABLE FOR DOWNLOAD AT APPLE STORE AND GOOGLE PLAY.

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
companys 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
2
3
4

Company Overview
Pulp and Paper Market
Financial and Operational Highlights
Final Remarks

Agenda

Company Overview
4

A Winning Player
Superior Asset Combination

Belmonte
Veracel
Caravelas
Portocel
Aracruz
Trs Lagoas

Main Figures 4Q14 LTM

Pulp capacity

million tons

5,300

Net revenues

R$ billion

7.1

Total Forest Base(1)

thousand hectares

968

Planted area(1)

thousand hectares

561

R$ billion

7.6

Net Debt/EBITDA (in Dollars)(2)

2.4

Net Debt/EBITDA (in Reais)

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.

Fibrias 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

Fibrias Commercial Strategy

Sales Mix by End Use - Fibria

Highlights

End Use - 4Q14

Region - 4Q14
N.
America
27%

Tissue
56%

Europe
40%
Asia
23%

Printing &
Writing
25%
Specialties
19%

Other
10%

Sales Mix by Region - Fibria

11% 9% 11% 10% 10% 10% 11% 10% 9% 10% 8%
22% 25%

14% 20%

37%

46% 41%

30%

46%

20%

8%

8%

9%

9% 10% 10%

20% 23% 25% 26% 21% 26% 26% 26% 27% 25% 23%
31% 28%

35% 44%

43% 41% 36%

42%

43% 35% 36%

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)

39% 40%
46% 42%

29% 29% 24%

26% 26% 30% 22% 28% 31% 30%
26% 27%
19% 22%
18%

4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14
North America

Europe

Asia

Other

Shareholder Structure and Corporate Governance

Votorantim
Industrial S.A.
(1)

29.42%

BNDES
Participaes (1)

30.38%

Free
Float (2)

General
Meeting

40.20%
Fiscal
Council
20% independent
members
Role of CEO and
chairman is split

Board of
Directors

Listed on Novo Mercado, highest level at BM&FBovespa:

Only 1 class of shares 100% voting rights
100% tag along rights (Brazilian corporate law establishes 80%)

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

Policies approved by the Board of Directors:

Indebtedness and Liquidity
Market Risk Management
Risk Management

Board of Directors with minimum 20% independent members

Corporate Governance

Financial Statements in International Standards IFRS

Related Parties Transactions

Adoption of Arbitration Chamber

Anti-Corruption

SEC Registered ADR Level III program

(1) Controlling group
(2) Free Float 40.14% + Treasury 0.06%

Information Disclosure
Securities Trading

Antitrust
Genetically Modified Eucalyptus

Pulp and Paper Market

9

In 2013, we stressed the difference between the expected scenario

and the realized one...
BHKP CAPACITY CHANGES
Expected scenario for 2013 in Nov2012
Eldorado

1,275

Suzano Maranho

Realized scenario in 2013

Eldorado

320

1,270

UPM Fray Bentos

100

DELAYED
Montes del Plata
Sappi Cloquet
Jari

555
-155

Sappi Cloquet

-410

Jari

Net
BEKP demand growth*

1,585
1,080

*Source: PPPC Outlook for Eucalyptus Market Pulp November 2012

-155
-410

Cellulose du Maroc

-140

Sodra Tofte

-60

Net
BEKP demand growth*

Unexpected
Closures
605
1,310

*Source: PPPC Outlook for Eucalyptus Market Pulp September 2014

10

As a result we had better prices than expected

BHKP Delivered to Europe (USD/t)

820

814

810

800
790

795
788

791
784

780

772
770

767

765

770

772

760
750
740
1Q13

2Q13

3Q13

4Q13

Consultants average for 2013

Annual 2013

Realized PIX/FOEX price

Consultants: Hawkins Wright, RISI and Brian McClay (published in the end 2012 for 2013 prices)

11

The better than expected scenario happened again last year...

BHKP CAPACITY CHANGES
Expected scenario for 2014 in Dec13

Realized scenario in 2014

230

Eldorado

1,275

Suzano Maranho
Montes del Plata

Suzano Maranho

830

1,100

Montes del Plata

560

Oji Nantong*

230

Eldorado

550

Oji Nantong*

235

UPM

100

Sappi Cloquet

-115

Sappi Cloquet

-70

Sodra Tofte

-120

Sodra Tofte

-120

APRIL Rizhao

2,660

Net
BEKP demand growth**

1,380

*Partly integrated to existing PM

**Source: PPPC Outlook for Eucalyptus Market Pulp November 2013

-65

Old Town

-85

Ence Huelva

-105

More unexpected
mill closures

Net

1,770

BEKP demand growth

1,734

*Approved license only for 500,000 t/y

12

 and also better prices than initially projected

BHKP Delivered to Europe (USD/t)

800

782
780

768
752

760
740

737

746
729

734

733

720

718
700

696
680
660
640
1Q14

2Q14

3Q14

Consultants average for 2014

4Q14

Annual 2014

Realized PIX/FOEX price

Consultants: Hawkins Wright, RISI and Brian McClay (published in the end 2013 for 2014 prices)

13

Then, what about 2015?

BHKP CAPACITY CHANGES

Expected scenario for 2015 in Dec14
Suzano Maranho

400
750

Montes del Plata

265

Oji Nantong

750

CMPC Guaiba II
200

Eldorado
Portucel Cacia

30

Old Town (Expera)

85

Sappi Cloquet
April Rizhao
Ence Huelva
Possible closures*
Net

115
-65
-315
-400 to -800

Realized scenario in 2015

1,415 to 1,815

BEKP demand growth**

1005

*Based on annual closures average (400,000 to 800,000 t/yr)

**Source: PPPC Outlook for Eucalyptus Market Pulp September 2014

14

Global Market BEKP Demand

Shipments of Eucalyptus Pulp
2014 vs. 2013(1)

2M2015 vs. 2M2014(2)

11%
16%

1,734 kt

20%
6%
5%

717 kt

386kt

378kt

13%

44%

537 kt

29%
58kt

92 kt

Total

(1)

North
America

Western
Europe

China

Others

Total

Source: PPPC World 20 December/2014

January/2015

(2)

North
America

13%

214kt

2%

83kt

21kt

Western
Europe

China

Others

Source: PPPC World 20 February/2015

Paper Capacity increase in China

2013

2014

2015

Total

FORECAST

REALIZED

PREVIOUS
FORECAST

LATEST
FORECAST

PREVIOUS
FORECAST

LATEST
FORECAST

PREVIOUS

LATEST

Woodfree

-25

199

256

550

760

525

1,215

Tissue

1,184

833

1,518

1,390

903

727

3,605

2,950

Cartonboard

2,428

2,128

1,300

2,100

300

380

4,028

4,608

Total

3,587

3,160

2,818

3,746

1,753

1,867

8,158

8,773

Source: Fibria and Independent Consultants

15

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

2013 - 2018 CAGR:

Hardwood: +2.8%
Softwood: +0.7%

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

Source: RISI conference, August 2014.

Softwood

Source: PPPC

NBSK vs. BHKP - Prices(1)

Demand growth rate

000 ton
Hardwood

1998
15.0

2008
24.5

2018
32.8

Growth
19982008

Growth
20082018

63%

34%

6.0

14.2

23.4

137%

63%

1000

150

900
800

100

Eucalyptus

1100

Spread Fev./15:
US$160

200

700

Average spread:
US$ 111

50

600
500

Softwood

17.6

21.6

24.8

Market Pulp

32.6

46.1

57.1

23%

15%

400

Spread
Source: PPPC. Excludes Sulphite and UKP market pulp.

(1)

Average spread

BHKP

NBSK

Source: FOEX |Average spread in the last 5 years.

16

Technical Age and Scale in the Market Pulp Industry

Further closures are expected due to lack of adequate investments in the industry
Hardwood (BHKP) Market Pulp
3.000

Softwood (BSKP) Market Pulp

PM Capacity, 1000 t/a

3.000

Weighted average
technical age 12.3 years

PM Capacity, 1000 t/a

Weighted average
technical age 21 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

Ence
Huelva

500

500

Old
Town

0
30

WEAK

20

10

0
30

WEAK

25

Technical Age, years

North American Pulp Mills

Other Pulp Mills

Closures

20
15
10
Technical Age, years

Grade Switch

On & Off

More than 7.7 million tons of capacity above 25 years and with annual capacity below 500,000 t/y.

17

Capacity closures DO happen

Closures of Hardwood Capacity Worldwide

(000 ton)
-85

-105

-540

-500

-830
-910
-1,085
-1,180
-1,260
2006

2007

2008

2009

2010

2011

2012

2013

2014-2016 E
as of Dec.14

Source: PPPC and Fibria

18

Among the industrys lowest cash cost producers

Total Cash Cost of BHKP delivered to Europe (US$/t)
Capacity
(k tons):

1,775

705

580

570

1,660

1,055

2,315

335

545

3,790

330

1,015

3,950

7,480

Interest
71

4Q14 net price:

US$ 552/t

46
69

41

86

121

34

38

41
48

55

38

67
111

498

= 31,405

5,300

508

456

468

420

404

424

424

W/K
Interest

119

Capex
Income Tax

51

SG&A

61

406
342

315

311

297
235

Cash Cost (US$/t)

18
39

186

Delivery (US$/t)

Source: Hawkins Wright (Outlook for Market Pulp, December 2014) | Fibrias 4Q14 considering a FX of R$/US$2.54. | Brazil ex-Fibria 3Q14 considering FX of R$/US$2.27.
Gray bar includes cash expenses as Interest, CAPEX, SG&A and Taxes (Source: RISI and Fibria).

19

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
APP South
Sumatra(2)

1.000
900

1,8
1,6

Rizhao

Maranho

Trs
Lagoas

700
APP
Hainan

600
500
400

Eldorado

Fray
Bentos
Mucuri
Veracel Nueva Aldea
Santa F

Valdivia

1,4

Montes
del Plata Guaba II

1,2

Klabin

1,0
Chenming
Zhanjiang

Kerinci
PL3

Capacity (000 ton)

800

BHKP prices - CIF Europe (US$/ton)

2,0

0,8

APP Guangxi
Oji
Nantong

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 (Dec/14), Brian McClay (Jan/14) and RISI (Dec/14)
(2) Partially integrated production

20

Lowest volatility among commodities

Commodities Historical Volatility (US$)(1)

35%

30%

26%

23%

23%

21%
15%
6%

Sugar

WTI Crude
Oil

Soy

LME Metals Ibovespa

Iron Ore

Cattle

FOEX PIX
BHKP

Change Fev/2015 vs. Fev/2014(3)

Sugar

Iron Ore

Crude Oil

Soy

LME
Metals

Ibovespa

Cattle

Pulp BHKP

Commoditiy Spot Price

-20%

-47%

-51%

-26%

5%

-2%

S&P Sector Index(2)

-24%

-45%

-50%

-26%

-11%

8%

5%

47% | 19%

FIBR3|FBR

(1) Since 2009 | (2) Except Iron Ore (Average of: Vale, Rio Tinto and BHP) and LME Metals | (3) As of Feb., 27 th

21

Financial and Operational Highlights

22

No exposure to eletricity shortage risks, in spite of which the

company has benefited from the sale of its surplus energy

466
26

4Q13

472

Wood

FX

( 22 )

(7)

Utilities

Energy
Consumption

Others

4Q14

+ 1.3%

Improved results boosted by energy sales and operational efficiency.

(Utilities: 4Q14: R$37/t I 3Q14: R$34/t I 4Q13: R$16/t)

23

Cash Production Cost saw a annual increase of 3.7% over the past
6 years
Fibria Cash Production Cost (1) (R$/ton)

CAGR: + 3.7%

505
432

2009 (2)

448

2010 (2)

471

473

2011

2012

2013

519

Consistently
controlling the
production
cash cost at a
level below
the inflation
pace.

2014

(1) Constant Currency (2) Excludes Conpacel

24

Net Results (R$ million) 2014

Hedge
FX Debt

3,530
(112)

2,791

(696)

851

(504)

(1,874)

(380)

141
Adjusted
EBITDA

Befiex

Other nonreccuring exp.

/non-cash

EBITDA

FX Debt / Early prepaid Net Interest

Hedge

debt

Deprec.,
amortiz.and
depletion

Taxes

(54)
Others (1)

163
Net Income

Non-recurring
effects
(1)

Includes other exchange rate/monetary variations and other financial income/expenses.

Mandatory dividends of R$37 million.

25

Free Cash Flow (1) 2014

R$ million

2,791

636

(1,591)
(411)
Adjusted
EBITDA

2014

Capex

Interest
(paid/received)

(136)

(29)

12

Working
Capital

Taxes

Others

(1)

Free Cash Flow

353

989

4Q14 receivables

Free Cash Flow

Modernization (trucks);

Higher sales volume (+107 kt);

R&D;

Change in cliente mix, with lower receivables forfaiting transactions;

TLS 2 (feasibility study).

FX effect.

(Pro-forma)

Capex includes investment in modernization and higher % of third-party wood, decreasing as from 2016;

2015

Debt service reduction;

Potencial improvement on working capital (customers and suppliers).

(1) Does not include: asset sales, expenses on bonds repurchase and tax credits from the BEFIEX program.

26

FX and Pulp Price explain 80% of Fibrias EBITDA Margin

Each 10% depreciation of the Real increases EBITDA by approx. R$600 million
3.13
Exchange Rate
Average (R$/US$)

Fibria net pulp price

(US$/t)

2.00

1.76

1.67

670

639

Marginal producer cost

(US$/t)(4)

912
660

1,067
676

627

29%

34%

2,526
EBITDA (R$ million)

2.29

610

572

564
1,709

40%
EBITDA Margin

581

2.10

456
1,179

Fibria net pulp price

(R$/t)

1.95

1,133

657

36%

1,964

2,253

2011

2012

1,281

680

40%

Market
Consensus

1,310

676

39%

2,796

2,791

2013

2014

1,522

2009 (1)

2010 (1)

2015

(1) Excludes Conpacel | (2) 2014 year end market consensus | (3) According to Focus Report (Brazilian Central Bank Apr. 10, 2015) | (4) According to Poyry full cost estimate - includes Manufacturing +
Delivered costs to Rotterdam + Depreciation + ROCE of 9%

27

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

11.1
8.9

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

2.7
2.4

2.3

3.23.4
3.0
2.7

1.7

1.7
4Q11

4.1

2Q14

Arauco

3Q14

4Q14

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)

Fibrias historical data in BRL.

28

Indebtdeness
Net Debt (Million)

Total Debt and Interest Expenses (Million)

Net Debt/EBITDA (US$)

Net Debt/EBITDA (R$)

2.8

2.7

2.7

Interest (US$)

61

50

44

2.6
2.5
7,849

2.4

3,351

R$

Dec/13

Dec/14

8,327
3,498

2,842

Sep/14

- 25%

8,574
4,172

2,984

Dec/13

9,773

7,549

7,313

Sep/14
R$

US$

3,135

Dec/14

US$

Average Tenor (months) and Cost of Debt* in US$ (% p.a.)

Debt Amortization Schedule (US$ Million)

4.3

893

600

3.7

632
459

52

375

364

363

3.4

600

(revolver)

55

55

Sep/14

Dec/14

223
293

93

(cash)

Liquidity 2015

2016

2017

Pre-payment

2018

BNDES

2019

ECN

2020

ACC/ACE

2021

22

2022

2023

Voto IV

Bonds

2024

Dec/13

(*) Considering the portion of debt in reais fully adjusted by the market swap curves at the end of
each period..

29

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$)

7.5

6.3
4.1

8.6

4.2

3.3

2.6

6.3

2.4

473

5.9
414

5.5

408

5.2

2010

2011

2012

Gross Debt

2013

2014

3.4 *

350
268

3.1 2.8

2009

4.6

200

2009

2010

2011

2012

2013

2014

Net Debt

Free Cash Flow

Increase

Interest
Reduction

Cost of Debt
Reduction

This dynamics
creates a virtuous
cycle

(*) Considering the portion of debt in reais fully adjusted by the market swap curves of Dec. 31, 2014.

30

New issuance better priced than Investment Grade issuers

Fibria 2024
Principal:

Highlights
US$ 600 million

Issuance Date:

May/2014

Coupon:

5.25% a.a.

Bookbuilding:

- SEC registered;

- IG Documentation;
- Stretch Debt maturities;

11.5x

Spread over T10Y:

- Fibria 2021 early redemption of US$430 million (78%

of the total).

275.0 bps

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%

Baa3/BBB/BBB

2029

US$ 500 MM

263 bps

5.25%

Odebrecht
Data as of Aug 07, 2014:

31

and performing better than Investment Grade issuers

Brazil Investment Grade Secondary G-Spread to Maturity (bps) (1)

493

266

232

311

288

287

328

344

363

522

563

404

370

LatAm Investment Grade Loans Spread over Libor (bps) (1)

225
160

140

140

143

150

COPEC

Ecopetrol

Raizen

Fibria

Colbun

Braskem

4 years

5 years

4 years

5 years

6 years

5 years

175

113

Avg. Term

(1)

As of March 2015

Molymet

TGI (O&G)

5 years

5 years

32

Fibria has a low correlation with Brazil

G-Spread (bps) (1)

Bonds Correlation (1)

800

0,9
0,8

700

0,8

600

0,3

500

400

300

-0,2

200

-0,6
100

Fibria 24 vs.
Petrobras 24
Fibria 2024
Petrobras 2024
(1)

Braskem 2024
Gerdau 2024

Klabin 2024
Samarco 2024

Odebrecht 2023
Brazil 2025

Fibria 24 vs.
Brazil 25

Fibria 24 vs. CDS

Brazil

Correlation since May 2014

Correlation since Jan 2015

Source: Bloomberg as of March 2015

33

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

34

Final Remarks
35

Max Value Project Zero base budgeting

Budget developed primarily based on input

consumption indicators

Only one discussion cycle, initially based on

budgetary guidelines

Individual discussion for each expenditure package,

including Sustaining CAPEX and OPEX

Discussion details based on the materiality of the

expense within the package

Robust basis increasing the visibility of the rationale

for the proposed budget amounts

Zero Base Budgeting encourages a questioning and

challenging attitude of the status quo
36

Max Value Project Zero base budgeting

Value achievement share by category

23%

100%

NPV expected curve

80%

75%
65%

70%

43%

60%

50%

50%
40%

30%

30%

33%

20%

15%

10%
0%

Forestry

Industrial

Logistics/Other

Total

2015

2016

2017

2018

2019

Approx. R$1.5 billion NPV

Note: (1) Technical Limit potential reflecting 2013 conditions; (2) Coverage of expenses with established Technical Limits (e.g. 374/3233=12%).
Source: Fibria, ZBB team analysis.

37

Max Value Project A hidden asset value

Book Value of own Land as of Sep/14:

R$1.2 billion

Market Price of own Land as of Dec/14:

Sep/14:
R$3.9 billion

Fibrias
Owned Land
Total

Ha

Book Value

Market Value

(000)

R$/ha

R$/ha

491

2,535

7,964

Land sold in 2013 The Parkia Deal:

- 206k ha;
- Up to R$1.65 billion (~R$8k per ha).

38

Max Value Project Turning areas per hectare into square meter

The targeted area represents only 0.6% of the land owned by Fibria;

Real estate thinking: minimum value creation of R$500 million NPV.

39

Fibria is seeking value creation for its shareholders with capital discipline

PULP

INDUSTRY

- Growth with discipline

CONSOLIDATION ?

- Best portfolio of projects

Potential
Growth
Prospects
BIO-ENERGY

OTHER OPPORTUNITIES

- Complementary to pulp

Portocel

- Ensyn

Land and forest

40

The maturity of synergies captured since Fibrias creation improved its

operating indicators
PRODUCTION VOLUME (000 t)

CASH COST (R$/ton)

BEST PRACTICES AND OPERATING STABILITY

+15%

-21%
656

5,054

5,299

5,184

5,271

624

596

432

448

2009*

2010*

5,274

549

545

471

473

505

519

2011

2012

2013

2014

4,600

2009*

2010*

2011

2012

2013

2014

Historical Value

SG&A (R$ million)

EBITDA (R$ million) - EBITDA MARGIN (%)

STRUCTURE AND PROCESS SIMPLIFICATION

900

593

-21%
826

593

766
605

40%
678
584

29%

699
648

Inflation Effect**

34%

2,526

651

1,964

36%

40%

39%

2,796

2,791

2013

2014

2,253

1,522

2009*

2010*

2011

Historical Value

2012

2013

2014

2009*

2010*

2011

2012

Inflation Effect**

* Excludes Conpacel | ** IPCA index considered to calculate the inflation effect.

41

Back up
42

Fibrias tax structure

Tax benefits (R$)
Fiscal - annual adjustment
Benefit

Amount
Annual tax deduction:
R$89 million (tax)

Goodwill
(Aracruz
acquisition)

Remaining Balance Dec/14:

R$1.1 billion (base)

Forestry Capex in
Mato Grosso do
Sul state

2014 tax deduction related to

depletion: R$37 million

Tax loss carry forward and tax credits

Maturity

Benefit

Amount

Tax loss
carryforward

2018

Balance up to Dec. 14: R$451

million (base)
Balance Dec./2014:
- PIS/COFINS: R$570 million

Accumulated tax
credits

Undefined

- Withholding tax (IR and CSLL):

R$681 million
- Befiex: R$455 million
- Reintegra: R$37 million

Tax payment (cash basis)

2009

2010

2011

2012

2013

2014

R$ 7 million

R$ 16 million

R$ 4 million

R$ 15 million

R$ 31 million

R$ 29 million

43

Due to productivity gains in its forests, Fibria had the opportunity to

explore this new ownership model
FIBRIAS GAINS IN IMACEL DUE TO INVESTMENTS IN BIOTECHNOLOGY (TONS OF PULP/HA/YEAR)

MAI* Pulp:
(adt/ha/year)

15.0
12.1
10.6

15.0

15.0

15.0

15.0

Conservative assumption

10.9

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

44

Leadership position
Industry Outlook(1)
Fiber Consumption
406 million t

59%

41%

Recycled Fiber
238 million t

Pulp
168 million t

18%

82%

Mechanical
30 million t

Chemical
138 million t

59%

41%

Integrated Mills
82 million t

Market Pulp
56 million t

54%

46%
Softwood/Other
26 million t

Hardwood
30 million t

33%

67%

Acacia/Other
10 million t

Eucalyptus
20 million t

74%
Other Eucalyptus
Pulp producers:
15 million t

(1)

26%

Fiber Consumption, Recycled Fiber and Pulp: RISI | Market Pulp, Hardwood and Eucalyptus: PPPC Global 100 Report December 2014

45

Supply structural changes puts pressure on the industry

MARKET PULP CAPACITY RANKING 2014 (000T)

MAIN PROJECTS
Project

Fibria
APRIL
Arauco
Suzano
CMPC
UPM-Kymmene
Georgia Pacific
Paper Excellence
Metsa Group
Stora Enso
Weyerhaeuser
Ilim
Eldorado
Mercer
Domtar
IP
Sodra
Resolute Forest
Canfor
ENCE

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

APP South Sumatra

Indonesia

2.0 Mt

1Q2017

BHKP

Confirmed

Fibria Trs Lagoas II

Brazil

1.75 Mt

BEKP

Unconfirmed

USD/Adt, 2013 cost level

COST CURVE EVOLUTION

2000

Bleached Softwood Kraft Pulp (BSKP)

4000

6000

Cost position
of marginal
producer

Cumulative Capacity Million t/a

Bleached Hardwood Kraft Pulp (BHKP)

Unbleached Kraft Pulp (UKP)
Mechanical Pulp (MP)
Source: Hawkins Wright , Poyry and Fibria Analysis (as of Dec. 2014).

46

Benefiting From Chinas Growth

Chinas Hardwood Imports of BHKP by Country (1)
(000s t)

World Tissue Consumption, 1991-2013 (3)

(million t)

Latin America is the

leading exporter of BHKP
to China, accounting to
approximately 42% of
China's total imports in
Jan/15.

Jan/2014

686

Jan/2015

600

205

186

160

Latin
America

25
20

10

186
16 18

BHKP Total

LTM Growth
Rate +4.2%

30

15

285
214

(kg/person/year)

35

Indonesia

Others*

USA

11

Canada

Western
Europe

1991 1996 2001 2006 2009 2010 2011 2012 2013

N.America
Middle East
Oceania

* includes Russia, China, Thailand and New Zealand.

China's Share of Market Pulp (2)

25%

20%

Between 2005 and 2014,

the Chinese market share
of eucalyptus shipments
increased by 19 p.p. (total
market pulp: + p.p.)

22%

21%

23%

23%

W.Europe
Japan
Africa

E.Europe
China

L.America
Asia FE

Per Capita Consumption of Tissue by World Region (3)

23%

(million t)

12
10

17%

(Kg/capita/year)

24

8
15%

12%

10%

14%

15
6

10%

10%
4
5%

15
12
7

0%

5
1

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Eucalyptus

Hardwood

Total

% Compared to the global Market Pulp

N.
West Japan Oceania East LatAm
America Europe
Europe

China

Africa

(1) PPPC Pulp China Flash Report January 2015

(2) PPPC W20. Coverage for chemical market pulp is 80% of world capacity
(3) RISI

47

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 2007 2016

Developed Markets: + 1.4%
Emerging Markets : + 6.7%

CAGR 1996 2006

Developed Markets: + 2.4%
Emerging Markets : + 6.9%

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

48