Corportiva Set2011 ENG
Transcript of Corportiva Set2011 ENG
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Corporate Presentation
September, 2011
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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 tobusiness, 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.
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The Company
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VCP and Aracruz Merged to Create Fibria
Shareholder StructureShareholder Structure
Votorantim Industrial
S.A. BNDESPar Free Float
29.34% 30.42(1) 40.24%(2)
(1) Position as of August 31, 2011. BNDESPar has 21% linked to a Shareholders Agreement with Votorantim Industrial S.A. during the first 3 years and 10.9% during the following 2 years.(2) Free Float 40.17% + Treasury 0.07%
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Improved Corporate Governance
Shareholders
Meeting
Shareholders
Meeting
Executive OfficersExecutive Officers
Board Advisory
Committees(1)Board Advisory
Committees(1)
Fiscal CouncilFiscal CouncilBoard of
Directors
Board of
Directors
9 Members: 20% Independent
Chairman CEO
Audit and Risks
Personnel and Remuneration
Finance
Sustainability
Board and CommitteesBoard and CommitteesImproved Corporate GovernanceImproved Corporate Governance
Listed on Novo Mercado, highest level of Corporate
Governance at BM&F Bovespa
Only 1 class of shares 100% vong rights
100% tag along rights (Brazilian corporate law establishes 80%)
Board of Directors with minimum 20% independent members
Financial Statements in International Standards IFRS
Adoption of Arbitration Chamber
Listed in the most important sustainability indexes
Policies approved by the Board of Directors
Liability and liquidity management
Market risks
Corporate governance
Information disclosure
Stock trading
(1) Members performance assessed by independent consulting firm
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A Winning Player
Port Terminal Pulp Unit Paper Unit
Main Figures(1)Main Figures(1)Superior Asset CombinationSuperior Asset Combination
Pulp capacity million tons 5.25
Paper capacity million tons 0.16
Net revenues R$ billion 6.2
Total area thousand ha 1,062(2)
Planted area thousand ha 599(2)
Net Debt R$ billion 7.9
Net Debt/EBITDA X 3.2Trs Lagoas
Santos
Piracicaba
Aracruz
Portocel
Caravelas
Belmonte
Veracel
Jacare
Source: Fibria(1) Last Twelve Months as of 2Q11.(2) As of June 30, 2011, including 50% of Veracel and excluding forest partnership areas (124 thousand ha).
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Modern Plants Lead to a Competitive Position in the Cost Curve
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Trs Lagoas Mato Grosso do Sul 1.3 million t/year Jacare So Paulo 1.1 million t/year
Aracruz Esprito Santo 2.3 million t/year Veracel Bahia 1.1 million t/year
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Fibrias Strategy
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Clear Leadership Position
Market Pulp Capacity Ranking 2010(2) (000t)Market Pulp Capacity Ranking 2010(2) (000t)Industry Outlook (1)Industry Outlook (1)
0 1000 2000 3000 4000 5000 6000
Cenibra
Canfor
West Fraser
ENCE
IP
Mercer
Ilim
Domtar
UPM-Kymmene
Botnia/M-realSuzano
Weyerhaeuser
Stora Enso
Sodra
CMPC
Georgia Pacific
APP
Arauco
APRIL
Fibria
Bleached Softwood Kraft Pulp (BSKP)
Bleached Hardwood Kraft Pulp (BHKP)
Unbleached Kraft Pulp (UKP)
Mechanical
Recycled Fiber
224 million t
46% 54%
66%
20% 80%
57% 43%
34%
36% 64%
31%69%
Paper & Board
392 million t
Pulp
167 million t
Chemical
134 million t
Mechanical
33 million t
Integrated Mills
85 million t
Market Pulp
46 million t
Hardwood
24 million t
Other Eucalyptus
Pulp producers:
11 million t
Softwood/Other
22 million t
Acacia/Other
8 million t
Eucalyptus
16 million t
(1) RISI and PPPC: considers 2010 demand(2) Hawkins Wright January 2011 9
5,250
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Relevant Market Share and Competitive Position in the Cost Curve
Average Cash Cost of BHKP(2) (US$/t)Average Cash Cost of BHKP(2) (US$/t)Fibrias Market Share (1)Fibrias Market Share (1)
11%
Total Hardwood Market Pulp:
25 million t
Total Market Pulp:
48.5 million t
Total Eucalyptus Market Pulp:
17 million t
(1) PPPC Global 100: Market Share estimated considering 2010 demand
(2) Source: Hawkins Wright as of April 2011 and Fibria 1Q11
22%
31%
482 495 485424 462 445 417
306 279 276 267
104 54 5595 47 52
37
65 73 53 55
586549 540 519 509
497 454
371 352 329 322
Mill Cash Cost Delivery Cost
10
10 million t
Hardwood Cash Cost (US$/t) vs Capacity ('000 t)
Capacity ('000s t)
200
300
400
500
600700
800
100
Cashcost(US$/t)
5000 10000 15000 20000 25000 30000
Bleached hardwood kraft
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Exchange Rates and Inflation Affect the Cost Structure
Wood: cost of land and minimum wage growth above inflation
Freight: low governmental investment in infra-structure (ports, roads, etc) and higher oil prices
Chemicals / energy / water: global demand for commodities add pressure on main raw materials
Labor: cost in Brazil in dollar terms is higher than in some developed countries
Real:116%
Canadian Dollar: 59%
Chilean Peso: 52%
Rupia: 4%
Exchange Rate Currencies Evolution versus Dollar (Index: Jan03 = 100)Exchange Rate Currencies Evolution versus Dollar (Index: Jan03 = 100)
InflationInflation
50
70
90
110
130
150
170
190
210
230
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Global Presence
Miami
Nyon Csomd
Hong Kong
So Paulo
29%
N.America
11%L.America
46%Europe
14%Asia
Fibria Sales Distribution Fibria OfficesSource: Fibria 2Q11
Fibrias Commercial StrategyFibrias Commercial Strategy
Differentiation: Customized pulp products to specific paper grades
Sole supplier to key customers focused on eucalyptus pulp to the tissue market
The top 10 customers represent, on average, 70% of sales
Over 20 years of relationship with many of the main clients
Global contractsTissue
58%P&W
23%
Speciali
ties
19%
End-Use 2Q11
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Focus on Premium End-Uses
Source: Fibria 2Q11 Earnings Results, PPPC, RISI and Fibria
Fibria's Pulp
Destination
Fibria's Pulp
Destination
2010-2025
Demand Growth (CAGR)
2010-2025
Demand Growth (CAGR)
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Market Pulp
Destination
Market Pulp
Destination
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Financial Highlights
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46%
20%
25%
9%
1Q11
Europe North America Asia Brazil/Others
2Q11 Performance
Pulp Sales MixPulp Sales MixKey IndicatorsKey Indicators
EBITDA (R$ million) and EBITDA Margin (%)EBITDA (R$ million) and EBITDA Margin (%)Cash Cost without downtimes(R$/t)Cash Cost without downtimes(R$/t)
2Q11 1Q11 2Q10 2Q11 vs1Q112Q11 vs
2Q10
Pulp Production (000 t) 1,271 1,319 1,164 -4% 9%
Pulp Sales (000 t) 1,230 1,259 1,214 -2% 1%
Paper Production (000 t) 31 29 31 9% 2%
Paper Sales (000 t) 31 36 29 -15% 5%
Net Revenue (R$ million) 1,459 1,548 1,628 -6% -10%
Pro Forma EBITDA (R$ million) 490 607 672 -19% -27%
EBITDA Margin (%) 34% 39% 41% -5 p.p. -7 p.p.
Financial Income (R$ million) 277 11 (310) - -Net Income (R$ million) 215 389 130 -45% 66%
46%
29%
14%
11%
2Q11
38%
27%
24%
11%
2Q10
448 446
462
2Q10 1Q11 2Q11
672
607
490
2Q10 1Q11 2Q11
41% 39%34%
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Competitiveness Project
Actions for increased operating efficiencyActions for increased operating efficiency
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1,164
1,271
2Q10 2Q11
Pulp Production ('000 t)
448
462
2Q10 2Q11
Cash Cost without downtimes (R$/t)
+3% (lower than
Brazilian inflation:
+6.5%)
Production gain:+9%
Action 2011 2012 2013
2011 Capex reduction of R$201 million
New bleaching line of Plant A Aracruz Unit
Higher operating stability
Optimization of wood transportation by barges
Aracruz Unit
Energy Matrix Jacare Unit
Global Sourcing
Rail Extension Trs Lagoas Unit
Long-term international logistics contract (STX)
Future Forestry Project
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Debt
Debt IndicatorsDebt Indicators
(R$
million)2Q11 1Q11 2Q10
2Q11 vs
1Q11
2Q11 vs
2Q10
Gross Debt 10,448 10,256 13,209 2% -21%
Cash(1) 2,496 2,297 2,364 9% 6%
Net Debt 7,952 7,959 10,846 0% -27%
16%
12%14%
2Q10 1Q11 2Q11
Short Term Debt (%) Net Debt/ EBITDA(2)(x)
4.7
2.9
3.2
2Q10 1Q11 2Q11
Debt by currency and instrument (%)Debt by currency and instrument (%)Debt Amortization Schedule (R$ billion)Debt Amortization Schedule (R$ billion)
1.9
0.91.3
1.8
1.2
5.1
1.0 0.80.6
0.8 0.6
6.6
2011 2012 2013 2014 2015 2016-2021
Jun/10 Jun/2011
(2) LTM EBITDA includes the results from Conpacel and KSR
Short term debt:
14% of totaldebt 16%
84%
Debt by Currency
Domestic Foreign
44%
16%
6%
23%4%
7%
Debt by Instrument
Bonds BNDES
Former Aracruz Shareholders Pre-PaymentNCE Others
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(1) Includes the fair value of the derivatives.
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Fibria20 Bond: US$ 750MM 7.5%
10NC5
Exchange Bond Fibria19: 94% to
Fibria20
Operational cash generation
Derivatives debt settlement:
US$ 2.6bn Debt: lower cost longer tenor
Liability Management
15.7
13.2 13.1
11.0 10.9 10.810.2
9.9
7.9 7.9
1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11
Promises delivered, now more ahead to goPromises delivered, now more ahead to go
Sale of Guaba US$ 1.4bn
Fibria19 Bond: US$ 1.0bn 9.25%
10NC5
Export pre-payment facilities: US$
1.175bn
Sale of Conpacel/KSR R$1.5bn
Fibria21 Bond Fibria21: US$ 750MM 6.75% 10NC5
US$ 500MM Revolving facility + US$ 300MM EPP
Covenants: 4.0x YE2011
Tight cost and CAPEX control
2011 Capex reduced by R$201 million
Piracicaba Unit: indicative price of US$ 313MM
Commitment to investment grade level
NetDebt(R$ bi)
Net Debt/EBITDA (x)
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7.8
7.2 7.26.5
5.6
4.73.9
3.6
2.93.2
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Investor Relations
E-mail: [email protected]
Phone: +55 (11) 2138-4565
Website: www.fibria.com.br/ir