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July, 2015
FIBRIA APP WITH THIS PRESENTATION IS AVAILABLE FOR DOWNLOAD AT APPLE STORE AND GOOGLE PLAY.
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
Pulp capacity
million tons
5,300
Net revenues
R$ billion
8.0
thousand hectares
967
Planted area(1)
thousand hectares
563
R$ billion
8.2
2.0
Net Debt
Net Debt/EBITDA (in Dollars)(2)
Trs Lagoas
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 - 2Q15
North
24%
Europe
42%
Tissue
49%
LatAm
8%
Asia
26%
Printing &
Writing
36%
Specialties
15%
18%
44%
9%
10%
9%
10%
20%
22%
25%
26%
26%
26%
30%
22%
44%
42%
37%
43%
8%
21%
Worldwide presence
Long-term relationships
9%
8%
10%
9%
10%
10%
10%
9%
25%
26%
26%
27%
24%
23%
26%
26%
31%
19%
23%
27%
27%
17%
31%
24%
35%
36%
46%
42%
39%
40%
47%
42%
29%
43%
1T12 2T12 3T12 4T12 1T13 2T13 3T13 4T13 1T14 2T14 3T14 4T14 1T15 2T15
Europe
North America
Asia
Other
Pulp volumes:
Selling price based on the average net price charged by Fibria at the Port of Paranagu (FOB Paranagu)
Agreement benefits:
Mutual value creation, with better servicing for both Companies customers base
8
Votorantim
Industrial S.A. (1)
29.42%
BNDES
Participaes (1)
30.21%
Free
Float (2)
General
Meeting
40.37%
Fiscal
Council
20% independent
members
Role of CEO and
chairman is split
Board of
Directors
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
Corporate Governance
Anti-Corruption
Information Disclosure
Securities Trading
Antitrust
Genetically Modified Eucalyptus
1,275
Suzano Maranho
320
1,270
100
DELAYED
Montes del Plata
Sappi Cloquet
Jari
555
-155
Sappi Cloquet
-410
Jari
Net
BEKP demand growth*
1,585
1,080
-155
-410
Cellulose du Maroc
-140
Sodra Tofte
-60
Net
BEKP demand growth*
Unexpected
Closures
605
1,310
11
814
810
800
790
795
788
791
784
780
772
770
767
765
770
772
4Q13
Annual 2013
760
750
740
1Q13
2Q13
3Q13
Consultants: Hawkins Wright, RISI and Brian McClay (published in the end 2012 for 2013 prices)
12
230
Eldorado
1,275
Suzano Maranho
Montes del Plata
Suzano Maranho
830
1,100
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
-65
Old Town
-85
Ence Huelva
-105
More unexpected
mill closures
Net
1,770
1,734
13
782
780
768
752
760
740
737
746
729
734
733
720
718
700
696
680
660
640
1Q14
2Q14
3Q14
4Q14
Annual 2014
Consultants: Hawkins Wright, RISI and Brian McClay (published in the end 2013 for 2014 prices)
14
400
750
Oji Nantong
750
CMPC Guaiba II
200
Eldorado
Portucel Cacia
30
85
Sappi Cloquet
April Rizhao
Ence Huelva
Possible closures*
Net
115
-65
-315
-400 to -800
1,415 to 1,815
1005
15
11%
10%
1,734 kt
20%
6%
5%
717 kt
386 kt
790 kt
13%
17%
537 kt
12%
92 kt
Total
(1)
North
America
Western
Europe
China
Others
Total
(2)
4%
99 kt
130 kt
North
America
Western
Europe
11%
319 kt
242 kt
China
Others
2015
Total
FORECAST
REALIZED
PREVIOUS
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
16
Commodities Differentiation
China GDP breakdown
8%
4%
4%
3%
3%
2%
2%
2%
2%
2%
2%
44%
47%
48%
48%
48%
48%
48%
48%
47%
47%
46%
49%
49%
48%
49%
49%
50%
50%
50%
51%
51%
52%
2008A
2009A
2010A
2011A
2012A
2013A
2014A
2015E
2016E
2017E
2018E
Consumption
Investment
Net Exports
Soybeans
Wheat
Crude oil
Iron ore
Sugar
BHKP
248
204
190
166
153
124
120
100
2008A
2009A
2010A
2011A
2012A
2013A
2014A
2015E
2016E
2017E
2018E
17
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
Ence
Huelva
500
500
Old
Town
30
WEAK
20
10
0
30
WEAK
25
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.
18
-105
-540
-445
-500
-750
-910
-1,085
-1,180
-1,260
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015-2017 E
(1)
As of April 2015
19
1.000
Horizonte II
900
1,6
Rizhao
Maranho
Trs
Lagoas
700
APP
Hainan
600
500
400
Eldorado
Santa F
1,4
Montes
del Plata Guaba II
Fray
Bentos
Mucuri
Veracel Nueva Aldea
Valdivia
1,8
1,2
Klabin
1,0
Chenming
Zhanjiang
Kerinci
PL3
800
2,0
0,8
APP Guangxi
300
0,6
Oji
Nantong
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 (Apr/15), Brian McClay (May/15) and RISI (Dec/14)
(2) Partially integrated production
20
166
160
150
140
130
122
120
110
100
90
88
80
70
Iron Ore
Soy Bean
Crude Oil
Sugar
Jun-15
May-15
Apr-15
Mar-15
Feb-15
Jan-15
Dec-14
Nov-14
Oct-14
Sep-14
Aug-14
Jul-14
Jun-14
May-14
Apr-14
Feb-14
Mar-14
Jan-14
Dec-13
Nov-13
Oct-13
Sep-13
Jul-13
Aug-13
Jun-13
May-13
Apr-13
Mar-13
Jan-13
Feb-13
Dec-12
Nov-12
Oct-12
Sep-12
Aug-12
Jul-12
30
Jun-12
42
May-12
40
Apr-12
53
Feb-12
50
Mar-12
61
Jan-12
60
Low volatility of hardwood pulp price, even though new capacities have
come on stream in the period.
21
46
34
40
25
25
11
11
15
13
25
30
20
19
13
10
-3
-7
-6
-7
-1
-1
-4
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
(1)
87
59
47
49
31
19
3
-8
-8
-8
1997
1998
1999
-2
2000
11
3
-6
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
22
2.00
1.76
1.67
670
639
2.29
610
572
563
Market
Consensus
1,745
1,179
912
660
1,067
676
627
29%
34%
2,526
EBITDA (R$ million)
581
2.10
456
40%
EBITDA Margin
1.95
1,133
657
36%
1,964
2,253
2011
2012
1,281
1,310
680
676
40%
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 Jul. 24th, 2015) | (4) According to Poyry full cost estimate - includes
Manufacturing + Delivered costs to Rotterdam + Depreciation + ROCE of 9%
24
583
559
35
2Q14
Wood
27
FX
12
Utilities
( 58 )
Others
2Q15
+ 4%
25
Cash Production Cost saw a annual increase of 3.7% over the past
6 years
Fibria Cash Production Cost (1) (R$/ton)
CAGR: + 3.7%
505
432
2009 (2)
448
2010 (2)
471
473
2011
2012
2013
519
Consistently
controlling the
production
cash cost at a
level below
the inflation
pace.
2014
26
146
MtM
hedge
swap
( 54 )
248
( 85 )
( 478 )
ZCC
FX Debt
1,157
( 394 )
current
( 64 )
deffered
Adjusted
EBITDA
2Q15
(1)
FX Debt /
MtM
MtM Debt
Hedge
Operational
Hedge
Hedge
Settlement
Net Interest
Deprec.,
amortiz. and
depletion
Income Taxes
Others
614
(1)
Net Income
(Loss)
2Q15
Includes non-recurring expenses/non-cash, other FX variation expenses and other financial income/expenses.
27
( 430 )
( 93 )
466
( 128 )
( 38 )
317
(2)
( 149 )
Adjusted EBITDA
Capex
Interest
(paid/received)
Working Capital
Taxes
(3)
Others
(1)
Dividends
2Q15
2Q14
ROE = 9.0% | ROE = 13.4%
ROIC = 10.1% | ROIC = 13.9%
(1) Does not include non-recurring items. | (2) Not considering dividends payment. | (3) Cash basis. For detailed information,, see 2Q15 Results Earnings Release (page 17).
28
Indebtdeness
Net Debt (Million)
Interest (US$)
2.88
2.34
2.43
- 35%
2.23
2.30
8,991
8,197
50
6,681
2,803
Jun/14
2,642
Mar/15
R$
33
9,352
8,457
3,033
35
1.95
3,840
9,015
2,915
- 24%
2,906
Jun/15
Jun/14
US$
Mar/15
R$
Jun/15
US$
600
554
(revolver)
3.5
3.5
3.6
447
369
350
186
264
90
2015
54
52
Jun/14
Mar/15
Jun/15
213
(cash)
Liquidity
52
2016
2017
2018
2019
2020
2021
21
2022
3
2023
Pre-payment
BNDES
ECN
ACC/ACE
Voto IV
Bond
2024
(*) Considering the portion of debt in reais fully adjusted by the market swap curves at the end
of each period.
29
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
3.6
11.1
4.5
8.9
4.5
3.7
1Q12
2Q12
3Q12
Fibria
4Q12
Suzano
1Q13
2Q13
Klabin
3Q13
4Q13
1Q14
CMPC
2Q14
3Q14
4Q14
Arauco
6.4
4.2
3.9
3.6
4.1
3.6
3.23.4
3.1
2.9
3.0
2.7
3.1
2.7
2.4 2.3
2.4
1.7
1.7
4Q11
7.7
2.9
1T15
4.5
2,2
2T15
Eldorado
Fibria
Arauco
CMPC
Klabin
Suzano
S&P
BBB-/Stable
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-/Stable
BB/Stable
(1)
30
7.5
8.6
4.1
6.3
4.2
3.3
2.4
2.6
2.0
473
6.3
5.9
414
5.5
408
5.2
4.6
3.4
3.6*
350
268
200
2.9 2.6
2009
2010
2011
2012
Gross Debt
2013
2014
Jun/15
2009
2010
2011
2012
2013
2014
161
LTM
Net Debt
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 June. 30, 2015.
31
Highlights
US$ 600 million
Issuance Date:
May/2014
Coupon:
5.25% a.a.
Bookbuilding:
- SEC registered;
- IG Documentation;
11.5x
275.0 bps
Rating
Maturity
Volume
T-Spread
Coupon
Fibria
2024
US$ 600 MM
275 bps
5.25%
Braskem
Baa3/BBB-/BBB-
2024
US$ 500 MM
340 bps
6.45%
Petrobras
Ba2/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:
32
724
614
296
298
315
Brasil 25
Embraer 23
Fibria 24
245
Globopar 22
327
345
360
365
Vale 22
Klabin 24
379
487
419
617
529
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 July 2015
Molymet
TGI (O&G)
5 years
5 years
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
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
36
Horizonte 2 Project
37
Competitiveness
Commercial
positioning
Long-term growth
potential
38
Start-up: 4Q2017
Capacity: 1.75 million tons
7,950
Fibria
CMPC
RGE/APRIL
Suzano
APP
Eldorado
UPM
Stora Enso
Arauco
Cenibra
ENCE
Altri
IP
Marubeni
Mitsubishi
Oji
Mondi
Nippon Paper
Verso
Resolute
Georgia-Pacific
Portucel Soporcel
Lwart
Pulp Mill Holding
Domtar
Klabin
Others
0
2000
4000
6000
8000
Current Capacity
New Capacity
39
32%
42%
19%
23%
45%
25%
4%
10%
40
2015
2016
2017
2018
2019
2020
2021
2,208
2,150
2,300
2,300
900
2,100
1,700
Confirmed
2,208
2,150
2,050
800
250
1,500
900
2,100
1,700
(600)
(600)
(600)
(600)
(600)
Potential
Closures (000 t)
(600)
(600)
Operating Rate not considering any project entering in 2017/2018 (theoretical scenario)
93.6%
90.0%
2015
88.6%
2016
95.3%
94.0%
93.9%
2019
2020
2021
91.1%
90.0%
90.0%
2019
2020
2021
90.3%
2017
2018
89.5%
2018
88.6%
89.7%
2015
2016
2017
Source: Fibria assumptions. Confirmed projects considers: Klabin Ortigueira, APP South Sumatra and Metsa nekoski
41
Schedule
May/15
Jun/15
4Q15
4Q17
Investment
approval
Equipment
purchase
Beginning of civil
work
Start-up
42
Forestry base
43
H2 Project will have the forest base ready for the start-up
120,000 ha
H2:
174,000 ha
Total:
294,000 ha
44
Logistics
45
Forestry Logistics
Low average distance from forest to mill
FOREST
MILL
95 km
H1 + H2 consolidated
46
Outbound logistics
Fibria has logistical alternatives on a competitive basis
Mill
Logistics and
commercial optimization
Greater bargaining
power with suppliers
North-South railroad
Waterway
Highway
Santos
Port
47
Financials
48
453
419
351
329
312
286
207
China
USA
Canada
Iberia
Indonesia
Chile/Uruguay
Brazil
173
158
Fibria w/ H2
Source: Hawkins Wright (Outlook for Market Pulp, April 2015) - FX considered by the consultant of R$/US$3.05.
H2 cash cost was estimated according to weighted average cost, after mill balance, converted by R$3.05. Includes energy sales.
49
Industrial and
logistics
45%
6,695
3,826
37%
Forestry (includes
forestry equipment)
632
361
Other(1)
379
217
7,706
4,404
Total
7%
7%
2015
2016
2017
2018
4%
2019
onwards
(1) Includes chemical plant leasing and investments to increase capacity to 1,850 kt/year.
(2) The calculation considers 1,750 kt/year of capacity.
50
INSTRUMENT
ESTIMATED AVERAGE
MATURITY
BNDES(2)
6.1 years
FDCO
8.5 years
ECAs
6.5 years
Banks
5 years
Bond Market
10 years
(1) Adjusted by the Market swap curves as of May 14th, 2015. Source: Bloomberg
(2) Considering 50% of TJLP, 25% of SELIC + spread and 25% CRA.
51
We expect Fibria to continue benefiting from higher operating cash flows which
would allow it to enlarge its Trs Lagoas industrial complex while keeping its debt at
reasonable levels for a low investment-grade rating
Fitchs base case, which assumes that the company builds a new pulp mill (Trs
Lagoas II) starting in 2015 and uses net pulp prices of between USD575 and USD675
per ton during the construction period, results in net leverage reaching 3.5x(1). Net
leverage would quickly decline to around 2.5x(1) once the mill becomes operational
in the second half of 2017
52
UNIT
Pulp production/year(1)
k tons
1,750
Expansion capex(2)
R$ billion
7.7
Sustaining capex(3)
R$/t
193
Cash cost(4)
R$/t
341
Energy surplus
MWh
120
53
Final Remarks
Economies of scale
54