BTG Pactual VI Latin American CEO Conference

October, 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 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

Main Figures 2Q15 LTM

Pulp capacity

million tons

5,300

Net revenues

R$ billion

8.0

Total Forest Base(1)

thousand hectares

967

Planted area(1)

thousand hectares

563

R$ billion

8.2

1.95

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.

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 - 2Q15

Region - 2Q15
North
24%

Europe
42%

Tissue
49%

LatAm
8%

Asia
26%

Printing &
Writing

36%
Specialties

15%

Net Revenues by Region - Fibria

9%
29%

18%

44%

9%

10%

9%

10%

20%

22%

25%

26%

26%

26%

30%

22%

44%

42%

37%

43%

8%
21%

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

9%

8%

10%

9%

10%

10%

10%

9%

Low dependence on volatile markets such as China

25%

26%

26%

27%

24%

23%

26%

26%

Low credit risk

100% certified pulp (FSC and PEFC/Cerflor)

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 Supply Agreement: Puma Project

Pulp volumes:

Minimum of 900 kt of hardwood for the first 4 years

75% of 900 kt for the fifth year (phase out 1)
50% of 900 kt for the sixth year (phase out 2)

Selling price based on the average net price charged by Fibria at the Port of Paranagu (FOB Paranagu)

Sales destination: Globally, except for South America

Operational startup: Mar/2016

Agreement benefits:

Logistics and commercial

structure synergies;

Logistics and commercial

optimization and synergies;

Ensure sales volumes;

Support customers growth and

enhance customers needs;

Ensure pulp market access with

Klabin brand.

Potential development of new

customers.

Mutual value creation, with better servicing for both Companies customers base
8

Shareholder Structure and Corporate Governance

Votorantim
Industrial S.A. (1)

29.42%

BNDES
Participaes (1)

29.08%

Free
Float (2)

General
Meeting

41.50%
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 41.44% + Treasury 0.06%

Information Disclosure
Securities Trading
Antitrust
Genetically Modified Eucalyptus

Pulp and Paper Market

10

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

11

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

4Q13

Annual 2013

760

750
740
1Q13

2Q13

3Q13

Consultants average for 2013

Realized PIX/FOEX price

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

12

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

13

 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)

14

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

15

Global Market BEKP Demand

Shipments of Eucalyptus Pulp
2014 vs. 2013(1)

6M2015 vs. 6M2014(2)

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

Source: PPPC World 20 December/2014

January/2015

Total
(2)

4%

99 kt

130 kt

North
America

Western
Europe

11%

319 kt

242 kt

China

Others

Source: PPPC World 20 Jun/2015

Paper Capacity increase in China

2014

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

Source: Fibria and Independent Consultants

16

China GDP vs. Eucalyptus Shipments (base 100)

200
180

172
160
140
120
100
80

77

60
40
20
-

China GDP

Eucalyptus Shipments

Source: Bloomberg and PPPC.

17

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

China commodity demand - basis 100

Corn

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

Source: Ita Macroeconomic Department and PPPC May/15

18

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

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.

19

Capacity closures DO happen

Closures of Hardwood Capacity Worldwide

(000 ton)
-85

-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)

Source: PPPC and Fibria

(1)

As of April 2015

20

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

Horizonte II

900

1,6

Rizhao

Maranho

Trs
Lagoas

700
APP
Hainan

600
500

400

Santa F

1,4

Montes
del Plata Guaba II

Eldorado

Fray
Bentos
Mucuri
Veracel Nueva Aldea

Valdivia

1,8

1,2

Klabin

1,0
Chenming
Zhanjiang

Kerinci
PL3

Capacity (000 ton)

BHKP prices - CIF Europe (US$/ton)

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 (July/15), Brian McClay (Sept./15) and RISI (May/15)
(2) Partially integrated production.

21

In the last 15 years, pulp volatility has been just 8%...why?

BHKP - FOEX Europe (base 100)

160

CPI (base 100)

120

80

2008-2009 Economic
crisis

40

Market price closer to producers marginal cost

The marginal cost producers are based in Europe and North America

Flattish industry cost curve

Higher flexibility to adjust supply side during imbalanced market

Lower dependency on Asian market (~25%) compared to hard commodities (70%+)

Market end users are linked to consumer goods, such as tissue

Incipient pulp price futures market and low liquidity

Source: Bloomberg July 31, 2015

Jun-15

Dec-14

Jun-14

Dec-13

Jun-13

Dec-12

Jun-12

Dec-11

Jun-11

Dec-10

Jun-10

Dec-09

Jun-09

Dec-08

Jun-08

Dec-07

Jun-07

Dec-06

Jun-06

Dec-05

Jun-05

Dec-04

Jun-04

Dec-03

Jun-03

Dec-02

Jun-02

Dec-01

Jun-01

Dec-00

Jun-00

Dec-99

The only commodity with lower volatility than FX

Historical Volatility of Commodities (US$)

35%

32%

30%
25%

25%

23%

23%

23%
15%

12%
6%

Sugar

Nickel

WTI
Crude Oil

Soy

Copper

Iron Ore

LME
Metals

Ibovespa

Cattle

FX

FOEX PIX
BHKP

Since 2009

23

Lowest volatility among commodities

100 = January 1st, 2012
220
210
200
190
180
170
160
150
140
130
120
110
100
90
80
70
60
50
40
30

215

124

74

Iron Ore

Soy Bean

Crude Oil

Sugar

BHKP Price (FOEX Europe)

Sep-15

Jul-15

May-15

Mar-15

Jan-15

Nov-14

Sep-14

Jul-14

May-14

Mar-14

Jan-14

Nov-13

Sep-13

Jul-13

May-13

Mar-13

Jan-13

Nov-12

Sep-12

Jul-12

May-12

Mar-12

Jan-12

50
46
40

Exchange Rate (USD - BRL)

Source: Bloomberg - September, 29th 2015.

Low volatility of hardwood pulp price, even though new capacities have
come on stream in the period.
24

Financial and Operational Highlights

25

Each 5% depreciation of the Real increases EBITDA by around

R$403m (11%) and FCF by R$482 m (45%)

3.39(3)
Exchange Rate
Average (R$/US$)

2.00

1.76
670

Fibria net pulp price

(US$/t)

1.67
639

1.95
581

2.15

2.35

2.69

610

572

561

583

Market
Consensus(2)

456
1,976
1,179

Fibria net pulp price

(R$/t)

912

40%

EBITDA Margin

29%

1,311
1,067

34%

1,344

1,509

1,133

36%

40%

39%

46%
3,682

2,526
1,964

1,522

2,796

2,791

2013

2014

2,253

EBITDA (R$ million)

2009(1)

2010(1)

2011

2012

LTM 2Q15

2015 E

(1) Excludes Conpacel | (2) 2015 year-end market consensus | (3) According to Focus Report (Brazilian Central Bank September 25, 2015)

26

FX sensitivity of Free Cash Flow

R$ million

FCF (R$ million)(1)

Sales proceeds which were

received after the end of
the quarter

FX

4.00 (3)

78

466(2)

EBITDA
Margin

373

248

116

263

2Q14

3Q14

4Q14

1Q15

2Q15

35%

35%

45%

50%

50%

Average FX
Free cash flow (R$ million)

Oct.

2T14

2T15

2.2295

3.0731

+38%

248

544

+119%

(1) Does not consider non recurring items | (2) Not considering dividends payment | (3) Ptax as of October 2nd, 2015.

27

Free Cash Flow(1) LTM 2Q15

R$ million
3,682

(1,657)
( 357 )

1.219
( 408 )

Adjusted EBITDA

Capex

Interest
(paid/received)

( 70 )

Working Capital

Evolution on return metrics

Taxes

(3)

29

Others (1)

1.070
( 149 )

Free Cash Flow (2)

Dividends

Free Cash Flow

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

Cash Production Cost saw a annual increase of 4.2% over the past
6 years
Fibria Cash Production Cost (1) (R$/ton)

CAGR: + 4.2%

505
432

448

2009 (2) 2010 (2)

471

473

2011

2012

2013

519

2014

531

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

LTM 2Q15

(1) Constant Currency (2) Excludes Conpacel

29

Indebtdeness
Net Debt (Million)

Gross Debt and Interest Expenses (Million)

Net Debt/EBITDA (R$)

Interest (US$)

Net Debt/EBITDA (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$

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

Debt Amortization Schedule (US$ Million)

818
626

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

Cash on hand : US$ 470 million

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.

30

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

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

3.1
2.9

1Q15

4.5
3.8
3.3
3.1
2.2

2Q15

Eldorado

Fibria

Arauco

CMPC

Klabin

Suzano

S&P

BBB-/Stable

BBB-/Stable

BBB-/Stable

BBB-/Negative

BB+/Stable

Moodys

Ba1/Positive

Baa3/Stable

Baa3/Negative

Ba2+/Stable

Fitch

BBB-/Stable

BBB/Stable

BBB+/Stable

BBB-/Stable

(1)

Fibrias historical data in BRL.

31

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$)

6.3

7.29

5.9

5.5
5.2

8.6

4.11

4.25

473
3.32

6.3

2.60

2.41

414

408

4.6
3.4

350

1.95

3.6(1)

268

200

164

2.9 2.6

2009

2010

2011

2012

Gross Debt

2013

2014

Jun/15

2009

2010

2011

2012

2013

2014

LTM
2Q15

Net Debt

Free Cash Flow

Increase

Interest
Reduction

Cost of Debt
Reduction

These dynamics
creates a virtuous
cycle

(*) Considering the portion of debt in reais fully adjusted by the market swap curves of June. 30, 2015.

32

Recent funding transactions

CRA (Certificate of Agribusiness

Receivables)

Reopening of the Syndicated Export

Prepayment

Amount: up to R$675m

Tenor: 6 years bullet

Coupon: max 102.5% CDI

Booking period: Sept/2015

Upsized Amount: US$400m

Book of US$515m

Average term: 5 years

Average Cost: Libor 3M + 1.43% p.a.

LatAm Investment Grade Loan Spread over Libor (bps)

215

Avg. Term
(years)

160

175

140

143

150

Raizen

Ecopetrol

Fibria

Colbun

Braskem

Molymet

Argos USA

113

120

COPEC

33

One of the best performances among Brazilian corporate issuers(1)

1050
961

786
607
362

367

Fibria 2024 BRF 2024

401

416

Embraer
2023/25

Globopar
2022/255

440

480

Brazil Klabin 2024

2022/25

486

489

Suzano
2024

Vale 2022

Samarco
2024

675

Gerdau
2024

Braskem
2024

Odebrecht Petrobras
2023/25
2024

(1) G-spread on September 28, 2015. Source: Bloomberg

34

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

35

Final Remarks
36

Fibria is able to create value for its shareholders with capital discipline

FREE CASH FLOW

BIO-ENERGY AND

PULP

INDUSTRY
CONSOLIDATION ?

Growth with discipline

Best portfolio of projects

OTHER OPPORTUNITIES

DIVIDENDS

Complementary to pulp

Portocel

Land and forest

WITHOUT JEOPARDIZING CREDIT

METRICS
37

Horizonte 2 Project
38

What is the importance of growth for Fibria?

Competitiveness

Commercial
positioning

Long-term growth
potential

Wider fixed costs dilution

Cost curve position improvement

Greater bargaining power with suppliers

Follow the growth of strategic customers

Developing new customers

Distribution to new geographic markets

Efficiency and competitiveness gains in logistics

Higher quality in customer service

Greater ability to capture new expansion market windows

Strong M&A position

39

Why expand Trs Lagoas?

ESTIMATED BHKP CAPACITY RANKING 2017 (000T)

Brownfield Project, synergies with current

operations

Modern plant, prepared for potential

expansion

Availability of wood and low average

distance from forest to mill

Forest based on the optionality concept and

prioritizing lease and partnership models

Additional energy surplus of 120 MWh

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 Klabin Agreement

New Capacity

New Capacity Horizonte II Project

Source: Poyry and Fibria Analysis (as of May 2015)

40

Pulp sales destination: Fibria growing where the market grows

37%
42%
19%

24%

36%
25%

4%

9%

Total sales volume distribution

after H2 start up(2)
Current sales volume distribution(1)

(1) Considers 2Q15 last twelve months. | (2) Includes Klabins sales volume

41

Schedule

Purchase of the
industrial plants

Beginning of
infrastructure and
purchase of the TGs

Beginning of forest
machinery deliveries

Beginning of
construction

Negotiations with
concession holders and
Port of Santos tendering

Beginning of
harvest

Beginning of
assembly

Definition of outbound
logistics formats

Initial hiring of harvest

workers

Startup

Utilities clearance
and commissioning

L1 interconnections
during maintenance
downtime

Hiring of operational
team

2Q15

3Q15

2015

4Q15

1Q16

2Q16

3Q16

2016

4Q16

1Q17

2Q17

3Q17

4Q17

2017
42

Forestry base
43

H2 Project will have the forest base ready for the start-up

Forestry base required:

H1:

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

Data Collection / Preliminary

Analysis

Ports
Highways
Railroads
Waterways

Analysis
Logistics Costs
Opex - Rates
Capex
Qualitative
Modal conditions

Mato Grosso
Brasilia

Gois
Mato
Grosso do
Sul

47

Financials
48

Even more competitive cash production cost

BHKP (US$/t)

457
421
351

347
298

291
214
170

China

USA

Iberia

Canada

Chile/Uruguay

Indonesia

Brazil

155

Fibria 2Q15 LTM Fibria w/ H2

Source: Hawkins Wright (Outlook for Market Pulp, July 2015) - FX considered by the consultant of R$/US$3.14.
H2 cash cost was estimated according to weighted average cost, after mill balance, converted by R$3.14. Includes energy sales.

49

Where the competitiveness comes from

Fixed cost dilution

Headcount synergy, by department

Engineering
Industrial
Procurement
Commercial
Logistics
Forestry

Others (1)
Full synergy

Strong synergy

Little synergy

(1) Accounting, Legal, HR, R&D, Environmental, GRC, IT and Communication departments.

50

Up to now, 70% of the expansion capex is committed

Expansion Breakdown by currency(1)
R$
MILLION

Index

R$

5,548

72

Inflation
indices

EUR(1)

2,004

26

FX

Expansion capex updated expected curve

58%

30%
USD(1)/Swedish
Krona

154

FX
7%

Total

7,7067

100

2015

2016

2017

1%

4%

2018

2019
onwards

(1) Considering USD/BRL of 2.80 and EUR/BRL of 3.13, according to

budget.

51

Funding for the H2 project

Sources (estimated amounts in R$ billion)

7.8

0.6
Q2 Excess
Cash(1)

BNDES

CRA

FDCO

ECAs

Banks

Working
Capital(2)

Total

Even with expansion capex at current levels of FX, leverage ratios can continue
to decrease
(1) Cash on hand above minimum cash balance at end of Jun-2015
(2) Working capital to be released in 2016 and 2017 in commercial deal with Klabin

52

Rating agencies understand that the Project will not jeopardize

Fibrias credit metrics

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

(1) According to rating agency methodology

53

Project financials at a glance

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

(1) Creep capacity will increase production to 1,850 kt/year

(2) Includes chemical leasing and investments in order to increase capacity to 1,850 kt/year.
(3) Estimated sustaining capex in perpetuity considering capacity of 1,850 kt/year.
(4) Estimated weighted average cost, after mill balance. Includes energy sales.

54

We dont think that such competitiveness is easily replicable, since the

scenario is becoming more complex
Land

Public funding constraints

Infrastructure/Logistics

Governance standards

Certified wood availability

Cost of capital

Environmental requirements

Credit rating

Although some potential

brownfields are listed,
there are significant
challenges.

Backup
56

Fibrias tax structure

Tax benefits (R$)
Fiscal - annual adjustment
Benefit

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

Goodwill
(Aracruz
acquisition)

Remaining Balance JUN/15:

R$ 0,965 billion (base)

Forestry Capex in
Mato Grosso do
Sul state

2015 tax deduction related to

depletion: R$ 9 million

Tax loss carry forward and tax credits

Maturity

Benefit

Amount

Tax loss
carryforward

2018

Balance up to JUN. 15: R$ 601

million (base)
Balance JUN./2015:
- PIS/COFINS: R$ 600 million

Accumulated tax
credits

Undefined

- Withholding tax (IR and CSLL):

R$ 776 million
- Befiex: R$ 405 million
- Reintegra: R$ 67 million

Tax payment (cash basis)

2010

2011

2012

2013

2014

2015

R$ 16 million

R$ 4 million

R$ 15 million

R$ 31 million

R$ 29 million

R$ 45.8 million

57

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

26%

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

58

Global Market Pulp Demand

Hardwood demand will continue to increase at a faster pace than Softwood
Hardwood (BHKP) vs. Softwood (BSKP) (000 ton)

Demand growth rate

40.000
35.000

000 ton

1999

2009

2019

Growth
19992009

Growth
20092019

Hardwood

16.3

24.8

33.8

52%

36%

Eucalyptus

6.0

15.9

24.1

165%

52%

Softwood

19.0

21.4

24.9

13%

16%

Market Pulp

35.3

46.2

58.7

30%

27%

30.000
25.000
20.000
15.000

2014 - 2019 CAGR:

Hardwood: +2.5%
Softwood: +0.8%

10.000
5.000

Hardwood

2019

2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

Softwood

Source: PPPC report (Sept. 2015)

Source: PPPC reports. Excludes Sulphite and UKP market pulp (Sept./15)

Paper Production Runnability with BHKP

Source: RISI conference, August 2014.

59

Benefiting From Chinas Growth

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

World Tissue Consumption, 1991-2013 (3)

(million t)

4.651

Latin America is the

leading exporter of BHKP
to China, accounting to
approximately 47% of
China's total imports in
6M15.

6M2014

4.014

6M2015

1.880

2.199

LTM Growth
Rate +4.2%

30
25
20
15

1.0301.048

BHKP Total

(kg/person/year)

35

977

10

1.203

Latin
Indonesia Others(2)
America (1)

95 95

19 101

USA

Canada

5
9

Western
Europe

1991 1996 2001 2006 2009 2010 2011 2012 2013

N.America
Middle East
Oceania

(1) includes South Africa and New Zealand. | (2) Includes China, Japan, Malaysia, Russia, Thailand and Vietnam.

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 June 2015

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

60