Release 4Q15
Transcript of Release 4Q15
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4Q15 EARNINGS RELEASEFebruary 3, 2016
Adjusted EBITDA totaled R$603 million in 4Q15, 25% up on 4Q14,and R$2.0 billion in 2015
Klabin's consolidated financial statements are presented in accordance with International Financial Reporting Standards (IFRS), as determined by CVM Instructions 457/07 and 485/10. Vale do Corisco’sinformation is not consolidated, being represented in the financial statements by equity income. Adjusted EBITDA is in accordance with CVM Instruction 527/12.Notes:Due to rounding, some figures in tables and graphs may not result in a precise sum. The EBITDA margin includes the effects of Vale do Corisco.LTM – Last twelve months
NET REVENUE
R$1,596
million
Net revenue of R$1,596 million, 27% up on 4Q14. Annual net revenuecame to R$5,688 million, 16% more than in 2014.
EXPORT VOLUME
52% growth
Exports totaled 190 thousand tonnes in 4Q15, 52% more than in 4Q14,and 627 thousand tonnes in 2015, 15% higher than the year before,underlining Klabin’s flexibility amidst Brazil’s weakening economicscenario.
ADJUSTED EBITDA
R$603million
Adjusted EBITDA of R$603 million in the quarter, with a margin of 37%,19% up on the same period last year. In 2015 as a whole, AdjustedEBITDA amounted to R$1,975 million, 15% more than in 2014.
INVESTMENTS
R$1.4billion
Given the acceleration of the Puma Project disbursements, capex cameto R$1,364 million in 4Q15, R$1,195 million of which allocated to thenew pulp plant. Annual investments stood at R$4,627 million, R$4,053million of which went to the Puma Project.
PUMA PROJECT
95% complete
The works for Klabin’s new 1.5 million tonne p.a. pulp plant closed 201595% complete, with 77% of the investments already disbursed.Operational startup is scheduled for March 2016.
December 31, 2015
KlabinMarket cap R$27 billion
KLBN11Closing price R$23.45
Daily traded vol. 4Q15 R$73 million
Conference CallPortuguese (with simultaneous
translation)Tuesday, 2/4/2016, 11:00 a.m. (Brasília)/
8:00 a.m (New York)Phone: (55 11) 3193-1133 - Password:
Klabinhttp://cast.comunique-se.com.br/Klabin/4Q15
IR Antonio Sergio AlfanoTiago Brasil Rocha
Daniel RosolenLucia Reis
Marcos MacielNatasha Utescher+55 11 3046-8401
www.klabin.com.br/ri [email protected]
∆ ∆ ∆
4Q15/3Q15 4Q15/4Q14 2015/2014
Sales volume (thousand tonnes) 499 463 443 8% 13% 1,833 1,771 3%
% Domestic Market 62% 67% 72% -5 p.p. -10 p.p. 66% 69% -3 p.p.Net Revenue 1,596 1,446 1,257 10% 27% 5,688 4,894 16%
% Domestic Market 62% 67% 75% -5 p.p. -13 p.p. 68% 75% -7 p.p.
Adjusted EBITDA 603 520 508 16% 19% 1,975 1,718 15%
Adjusted EBITDA Margin 37% 36% 40% 1 p.p. -3 p.p. 34% 35% -1 p.p.
Net Income (loss) 521 (1,341) (127) n/a n/a (1,253) 730 n/a
Net Debt 12,411 11,614 5,242 7% 137% 12,411 5,242 137%
Net Debt / EBITDA (LTM - BRL) 6.3x 6.2x 3.1x 6.3x 3.1x
Net Debt / EBITDA (LTM - USD) 5.4x 4.6x 2.3x 5.4x 2.3x
Capex 1,364 1,113 917 23% 49% 4,627 2,945 57%
2015 2014R$ million 4Q15 3Q15 4Q14
http://cast.comunique-se.com.br/Klabin/4Q15http://cast.comunique-se.com.br/Klabin/4Q15http://spsrv017/FileServerFL/Corporativa/Relacoes%20com%20Investidores/2015/2T15/Release/www.klabin.com.br/rihttp://spsrv017/FileServerFL/Corporativa/Relacoes%20com%20Investidores/2015/2T15/Release/www.klabin.com.br/rihttp://spsrv017/FileServerFL/Corporativa/Relacoes%20com%20Investidores/2015/2T15/Release/www.klabin.com.br/rihttp://cast.comunique-se.com.br/Klabin/4Q15
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SUMMARYThe fourth quarter of 2015 concluded a year
marked by a strong slowdown in economic activity
and increasing inflation in Brazil. Throughout the
year, this scenario, together with the upturn in
unemployment and the decline in investments,
led to market pessimism, in turn leading to a
substantial devaluation of the real and a reduction
in the stock market indices. The situation was
further aggravated by the country’s political crisis,
which is jeopardizing approval of the measures
needed to rekindle confidence in the country’s
economy.
On the international front, the end of the yearwas marked by a hefty slide in the price of certain
commodities, especially oil, which, together with
news of more modest Chinese growth, has been
generating a good deal of uncertainty and
volatility in the international markets.
Brazil’s economic slowdown continued to impact
the paper and packaging markets in the final
quarter. In its preliminary December report, the
Brazilian Corrugated Boxes Association (ABPO),
stated that corrugated box shipments fell by 3% in
4Q15 year-on-year and in 2015 over 2014, while
the most recent figures from the Brazilian Tree
Industry (IBÁ, formerly Bracelpa) pointed to a 6%
downturn in annual coated board sales (excluding
liquid packaging boards).
On the other hand, in the international kraftliner
market, the European list price averaged €592/t in
4Q15, flat over 3Q15 and 5% up year-on-year,
according to FOEX. This international price
stability, together with the strong devaluation of
the real throughout 2015, favored Klabin’s exports
in all its market segments.
Given the slowing of the domestic markets and
the improved conditions in the export market,
Klabin, taking advantage of its flexible and
competitive product line, routed more volume to
markets abroad, where sales of every product line
increased over both 3Q15 and 4Q14. In the
domestic market, the economic slowdown was
reflected in reduced sales in the conversion
segment, partially offset by the healthy
performance of coated board sales thanks to
Klabin’s resilient client portfolio. As a result,
driven by the substantial 52% year-on-year upturn
in export volume in 4Q15, the Company reported
record sales in the quarter, with exports
accounting for 38% of the total, versus 28% in
4Q14.
Costs were impacted by strong inflationary
pressure throughout 2015, especially on energy,
fuel and dollar-denominated input prices. On the
other hand, the efforts to control costs had the
desired effect and, together with the increase in
volume which partially diluted fixed production
costs, ensured that the quarterly and 12-month
upturns in the cash cost per tonne were both in
line with current domestic inflation.
Thus, despite the deterioration in Brazil’s
economic indicators since the beginning of the
year, which directly jeopardized the paper andpackaging markets and the production costs of
companies operating in the country, Klabin once
again underlined the efficiency of its versatile
product line and its presence in a wide range of
markets. In spite of the adverse market
conditions, the Company was able to maintain
consistent results. Excluding non-recurring land
sales figure by R$27 million that increased the
4Q14, fourth-quarter adjusted EBITDA was 25%
up, and totaled R$603 million. In the last 12
months Adjusted EBITDA came to R$1,975 million,
achiveving the 18th consecutive quarter of
growth.
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Sales Volume LTM(excluding wood – million tonnes)
Adjusted EBITDA LTM(R$ million)
9 2 2
9 3 9
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2 7
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8 9
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EBITDA GROWTH
1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.7 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8 1.8
Jun-11 Sep-11 Dec-11Mar-12 Jun-12 Sep-12 Dec-12Mar-13 Jun-13 Sep-13 Dec-13Mar-14 Jun-14 Sep-14Dec-14Mar-15 Jun-15 Sep-15Dec-15
Exchange Rate
After the strong devaluation of the first nine months, the real was more stable in 4Q15, closing the quarter at
R$3.90/US$, 2% down on 3Q15. The average exchange rate, still reflecting the real ’s downward trajectory,
stood at R$3.84/US$, 9% up on 3Q15 and 51% more than in 4Q14.
OPERATING AND FINANCIAL PERFORMANCE
Sales volume
Fourth-quarter sales volume, excluding wood, totaled 499 thousand tonnes, 13% up year-on-year despite the
worsening of activity in Brazil’s packaging markets. In addition to recent increases in its production capacity,this sales upturn once again reflected the resilience of Klabin’s markets and its flexible product line, which
enabled it to route more volume abroad in view of the weakening of the domestic markets.
The devaluation of the real throughout the year and the slowdown in Brazil’s economic activity favored
exports. In this context, Klabin expanded its international paper and coated board sales, more than offsetting
the impacts of sluggish consumption in the domestic and converted packaging markets.
As a result, fourth-quarter export volume increased by a substantial 52% year-on-year, accounting for 38% of
total sales, versus 28% in 4Q14. Exports’ share of total sales volume also improved over the 33% recorded in
the previous quarter. With more sales being routed abroad, volume in the domestic market, where there is a
large share of conversion products, fell by 3% over 4Q14.
∆ ∆ ∆
4Q15/3Q15 4Q15/4Q14 2015/2014
Average Rate 3.84 3.54 2.54 9% 51% 3.34 2.35 42%
End Rate 3.90 3.97 2.66 -2% 47% 3.90 2.66 47%
Source: Bacen
R$ / US$ 4Q15 3Q15 2015 20144Q14
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Annual sales came to 1,833 thousand tonnes, 4% more than the 1,771 thousand tonnes recorded in 2014,
due to the recent capacity increases in Klabin’s paper units and higher export volume, which climbed by 15%
over the year before.
Net Revenue
Net revenue including wood totaled R$1,596 million in 4Q15, 27% up on 4Q14, largely due to higher sales to
the international market, fueled by the period devaluation of the real against the dollar. Given the increased
share of exports in total sales, net revenue from international sales almost doubled, from R$309 million in
4Q14 to R$606 million in 4Q15, with exports accounting for 38% of the total, versus 25% in 4Q14.
Revenue in the domestic market achieved growth of 5% in the period compared to 4Q14, emphasizing once
again the strength of Klabin's customer base in the face of the economic weakness and more specifically the
markets for packaging in Brazil.
Kraftliner
24%
Coated Board
39%
Conversion
35%
Others
2%
Sales volume by product
4Q15
4Q14 4Q15
Domestic Market Exports
62%
28%
72%
38%443
499
Sales volume(excluding wood – tsd tonnes)
Kraftliner
16%
Coated Board
40%
Conversion
37%
Others
2%
Wood
5%
Net revenue by product 4Q15
4Q14 4Q15
Domestic Market Exports
62%
25%
75%
38%1,257
1,596
Net revenue
(R$ million)
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Throughout the year, Klabin’s efforts to seek better markets in different economic scenarios once again
resulted in a net revenue upturn. In 2015, despite the deterioration in Brazil’s packaging paper market,
revenue totaled R$5,688 million, 16% more than in 2014.
Pro-forma net revenue, including Klabin’s proportional share of revenue from Florestal Vale do Corisco S.A.,
came to R$1,611 million in the quarter and R$5,749 million in the full year.
Operating Costs and Expenses
The unit cash cost, which includes fixed and variable costs and operating expenses, came to R$2,020/t in
4Q15. Excluding non-recurring items from other operating revenue and expenses, which had a relevant
impact on the year-on-year comparison, the unit cash cost came to R$2,041/t, 12.5% up on 4Q14, mainly due
to the higher cost of energy acquisitions and dollar-denominated inputs, in addition to higher selling
expenses with the increase of the export volume. However, the upturn was partially mitigated by lower wood
harvesting costs and the dilution of fixed costs due to higher sales volume.
In the year as a whole, also excluding non-recurring items from other operating revenue and expenses, the
unit cash cost stood at R$2,041/t, 10% more than in 2014, in line with period inflation, despite the upturn in
energy and dollar-denominated inputs above the official government inflation index, due to the Company’s
cost reduction programs and the increase in sales volume, partially diluting fixed costs.
The cost of goods sold per tonne, excluding depreciation, depletion and amortization, came to R$1,600/t in
4Q15, 13% up on 4Q14, due to the substantial increase in the cost of energy and dollar-denominated inputs,
partially offset by lower wood costs and the greater dilution of fixed production costs. In 2015, the cost of
goods sold per tonne, excluding depreciation, depletion and amortization, moved up by 10% over the
previous year, in line with inflation.
Selling expenses totaled R$121 million in the quarter, 27% up on 4Q14, in line with the period upturn in sales
revenue, especially to the export market, and accounted for 7.6% of net revenue, the same ratio as in 4Q14.
Annual selling expenses came to R$428 million, 13% more than in 2014, also impacted by higher sales
revenue.
Fourth-quarter general and administrative expenses stood at R$101 million. Excluding the effects from the
review of payroll tax exemption at the end of 2014 by the Brazilian government and other non-recurring
expenses in the period, the upturn came to 16% and was mainly due to the collective bargaining agreement
in the fourth quarter and the one-off hiring of personnel related to the Puma Project. Annual administrative
expenses came to R$338 million, 13% up on 2014.
Other operating revenue (expenses) resulted in revenue of R$10 million in 4Q15. In 2015, the Company
recorded an expense of R$13 million, versus revenue of R$85 million in 2014, which includes the sale of
forest assets amounting to R$27 million in 4Q14.
Effect of the variation in the fair value of biological assets
The effect of the variation in the fair value of biological assets was a gain of R$227 million in 4Q15, primarily
due to the growth of forests that were recognized at their fair value. In the same period, the effect of the
depletion of the fair value of biological assets on the cost of goods sold was R$156 million. As a result, the
non-cash impact of the variation in the fair value of biological assets on operating income (EBIT) in the
quarter was a gain of R$71 million.
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Operating Cash Flow (EBITDA)
Despite inflationary pressure on production costs since the beginning of the year and the slowing of Brazil’s
economy, the upturn in fourth-quarter sales revenue once again boosted results, and operating cash flow
(adjusted EBITDA) came to R$603 million, 19% up year-on-year, with an EBITDA margin of 37%. Excluding
non-recurring land sales of R$27 million in 4Q14, the increase came to 25%.
The high competitiveness and quality of its diversified product line has enabled Klabin to expand its
international sales at a time when weak economic activity in Brazil resulted in the deterioration of the
domestic paper and packaging markets. Despite the worsening national scenario, however, total sales
climbed by 13% year-on-year, driven by the 52% increase in export volume. It is worth noting that the
improved export performance was fueled by the period appreciation of the dollar, which pushed up Klabin’s
export revenue by 96% over 4Q14, a factor that played a crucial role in the period results upturn.
In the year as a whole, also due to the flexibility of being able to ship more volume abroad, adjusted EBITDA
came to R$1,975 million, 15% up on 2014, with an EBITDA margin of 34%, in line with the previous year.
These figures include Klabin’s share of Florestal Vale do Corisco S.A., which totaled R$15 million in the
quarter and R$42 million in the year.
Indebtedness and Financial Investments
Gross debt totaled R$18,022 million on December 31, 2015, R$498 million more than at the close of 3Q15,
chiefly due to new funding to cover Puma Project disbursements. Of this total, R$12,343 million, or 68%
(US$3,161 million) was denominated in dollars, primarily export pre-payment facilities.
Cash and financial investments closed the quarter at R$5,611 million, R$299 million less than in 3Q15, mainly
due to disbursements for the execution of the Puma Project, partially offset by new financing lines and theCompany’s cash flow. This amount exceeds financing amortizations due in the next 29 months.
Consolidated net debt totaled R$12,411 million on December 31, R$797 million more than the R$11,614
million recorded on September 30, chiefly due to investments of R$1.4 billion in the quarter. On the other
hand, the Company’s strong cash flow and the lower end-of-quarter exchange rate in relation to 3Q15 kept
the net debt / adjusted EBITDA ratio stable at 6.3x, versus 6.2x on September 30.
It is worth noting that throughout 2015, the strong devaluation of the real affected the net debt/EBITDA ratio
by 1.6x. Considering EBITDA in the last 12 months and net debt in dollars, the year-end ratio stood at 5.4x. It
is worth emphasizing that, in addition to Klabin not having any financial covenants attached to its debt, the
∆ ∆ ∆
4Q15/3Q15 4Q15/4Q14 2015/2014
Net Income (loss) 521 (1,341) (127) n/a n/a (1,253) 730 n/a
(+) Income taxes and social contribution 264 (717) (88) n/a n/a (695) 323 n/a
(+) Net Financial Revenues (232) 2,490 451 n/a n/a 3,441 646 533%
(+) Depreciation, amortization, depletion 268 186 295 44% -9% 999 952 5%
Adjustments according to IN CVM 527/12 art. 4º
(-) Biological assets adjustment (227) (98) (17) 132% 1235% (528) (921) -43%
(-) Equity Pickup (7) (11) (14) -35% -50% (31) (49) -37%
(+) Vale do Corisco 15 10 9 49% 67% 42 36 17%
Ajusted EBITDA 603 520 508 16% 19% 1,975 1,718 15%
Adjusted EBITDA Margin 37% 36% 40% 1 p.p. -3 p.p. 34% 35% -1 p.p.n/a - Not applicable
Note: Adjusted EBITDA margin is calculated considering the pro forma net revenue, which includes Vale do Corisco
3Q15 4Q14 2015 2014R$ million 4Q15
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exchange variation effect is of a purely accounting nature and most of its impact is on financing related to
export pre-payment facilities not linked to the Puma Project and already backed by Klabin’s fu ture exports.
The average maturity term at the close of 4Q15 was stable at 50 months (42 months for local-currency
financing and 54 months for foreign-currency funding). Short-term debt accounted for 11% of the total and
borrowing rates in local and foreign currency averaged 12.4% p.a. and 4.7% p.a., respectively.
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NET DEBT AND LEVERAGE
Net Debt (R$ million) Net Debt/Ebitda (R$) Net Debt/Ebitda (US$)
Debt (R$ million)Short term
Local currency 978 5% 934 6%
Foreign currency 1,068 6% 1,084 6%
Total short term 2,046 11% 2,018 12%
Long term
Local currency 4,701 26% 4,797 27%
Foreign currency 11,275 63% 10,709 61%
Total long term 15,976 89% 15,506 88%
Total local currency 5,679 32% 5,731 33%
Total foreign currency 12,343 68% 11,793 67%
Gross debt 18,022 17,524
(-) Cash 5,611 5,910
Net debt 12,411 11,614
Net debt / EBITDA (LTM) 6.3x 6.2x
09/30/201512/30/2015
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Financial Result
Despite higher Brazilian interest rates and the increase in the Company’s gross debt due to the contracting of
financing lines for the Puma Project, financial expenses remained stable in 4Q15. Thanks to the Company’s
liability management, resulting in long-term funding at attractive costs, financial expenses came to R$234
million in 4Q15, a slight increase over the R$225 million recorded in 4Q14.
Financial revenue came to R$160 million in the quarter, versus R$132 million in 4Q14, chiefly due to the
upturn in Brazilian interest rates that remunerate the Company’s cash.
The positive impact of higher financial revenue and the slight increase in financial expenses led to a negative
financial result, excluding the exchange variation, of R$74 million in 4Q15, a R$19 million improvement over
the negative R$93 million recorded in 4Q14.
The exchange rate closed the quarter 2% down on the end of September 2015. Due to the impact on foreign
currency debt, the net foreign exchange variation was positive by R$306 million in the quarter. However, this
was not enough to offset the impact of the strong devaluation of the real on foreign currency debt in 2015,
and the annual net foreign exchange variation came to a negative R$3,174 million. Note that the exchange
variation has an exclusively accounting effect on the Company’s balance sheet, with no significant cash
impact in the short term.
BUSINESS PERFORMANCE
Consolidated information by business unit in 2015:
BUSINESS UNIT - FORESTRY
∆ ∆ ∆
4Q15/3Q15 4Q15/4Q14 2015/2014
Wood 865 600 797 44% 9% 3,204 2,870 12%
R$ millionWood 77 81 70 -5% 9% 362 332 9%
201420154Q14thousand tonnes 4Q15 3Q15
R$ million Forestry Papers Conversion Consolidation TotalNet revenue
Domestic market 364 1,422 2,055 - 3,841
Exports - 1,611 235 - 1,846
Third part revenue 364 3,033 2,290 - 5,687
Segments revenue 628 1,102 24 (1,754) -
Total net revenue 992 4,135 2,314 (1,754) 5,687
Change in fair value - biological assets 536 - - - 536
Cost of goods sold (1,261) (2,573) (1,905) 1,758 (3,981)
Gross income 267 1,562 409 4 2,242
Operating expenses (54) (413) (270) (12) (749)
Operating results before financial results 213 1,149 139 (8) 1,493
Note: In this table, total net revenue includes sales of other products.
* Forestry COGS includes the exaustion of the fair value of biological assets in the period.
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Fourth-quarter log sales to third parties totaled 865 thousand tonnes, 9% up on 4Q14, favored by the
appreciation of the dollar, which fueled higher wood product exports by Klabin’s clients, essentially plywood
and moldings. Net revenue totaled R$77 million, also 9% up year-on-year.
With the higher exchange rate benefiting exporters, the wood market has proved to be resilient. Annual log
sales climbed by 12% over 2014 to 3,204 thousand tonnes, generating revenue of R$362 million.
BUSINESS UNIT - PAPER
Kraftliner
In 4Q15, the greater availability of Klabin’s recycled paper due to the recent capacity increases was routed to
corrugated box production, freeing virgin fiber paper volume for exports. This movement was fueled by the
substantial increase in the exchange rate and was enabled by Klabin’s flexibility in adapting to different
economic scenarios. As a result, kraftliner sales totaled 119 thousand tonnes, generating revenue of R$261
million, up by 32% and 63%, respectively, over 4Q14. It is worth noting that, in the same period, export sales
climbed by 65%, virtually doubling kraftliner revenue from international markets.
In addition, according to FOEX, international kraftliner prices increased from €566/t in 4Q14, to €592/t in
4Q15. In the domestic market, despite the economic slowdown, cost pressure on the production chain from
energy, OCC and personnel has been sustaining packaging paper prices.
In the year as a whole, Klabin took advantage of its market and product flexibility to increase kraftliner sales
following the paper capacity upturns in 2014 and 2015. Annual sales came to 418 thousand tonnes, 8% more
than in 2014, led by the 20% increase in exports. Net revenue amounted to R$858 million, 34% up in the
same period.
Coated BoardsIn 4Q15, coated board sales came to 194 thousand tonnes, 17% more than 4Q14 and a new record, thanks to
the greater availability of coated boards after the debottlenecking of machine no. 9 and the routing of sales
to the international market, fueled by the devaluation of the real. Consequently, period net revenue came to
R$637 million, 42% up year-on-year.
The excellent receptivity of Klabin’s coated boards and the high exchange rate boosted exports, whose
volume and net revenue grew by 41% and 95% respectively over 4Q14. In Brazil as whole, the Brazilian Tree
Industry (IBÁ, formerly Bracelpa), the figures reported a 6% reduction in coated board sales in 2015 over 20’4
(excluding liquid packaging boards), reflecting the slowdown in economic activity. However, given the
∆ ∆ ∆
4Q15/3Q15 4Q15/4Q14 2015/2014
Kraftliner DM 23 27 32 -15% -27% 116 137 -16%
Kraftliner EM 95 79 58 21% 65% 303 252 20%Total Kraftliner 119 106 90 12% 32% 418 389 8%
Coated boards DM 109 106 106 4% 3% 396 377 5%Coated boards EM 84 67 60 27% 41% 289 260 11%Total Coated boards 194 172 166 13% 17% 685 637 8%
Total Paper 312 278 256 12% 22% 1,103 1,026 8%
R$ million
Kraftliner 261 226 160 16% 63% 858 639 34%Coated boards 637 529 450 20% 42% 2,096 1,661 26%Total Paper 898 755 610 19% 47% 2,954 2,300 28%
20154Q14 2014thousand tonnes 4Q15 3Q15
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R$ million 4Q15 2015Forestry 27 97
Maintenance 114 348
Special projects and growth 28 129
Puma Project 1,195 4,053
Total 1,364 4,627
resilience of some of the Company’s markets, notably the beverage segment, Klabin’s own domestic sales
performed well.
In 2015, Klabin’s coated board sales came to 685 thousand tonnes, 8% up on the previous year, fueled by the
debottlenecking of paper machine no. 9 in the Monte Alegre plant in mid-2014, which mainly increased the
portion of output shipped abroad. In addition to the capacity increase, the Company’s flexibility, allowing it to
route more volume to exports, resulted in net revenue increasing by 26% over 2014 to R$2,096 million.
BUSINESS UNIT - CONVERSION
According to the Brazilian Corrugated Boxes Association (ABPO), annual and fourth-quarter sales fell by 3.1%
and 2.7%, respectively, reflecting the deterioration in Brazilian economic activity and the even bigger
industrial slowdown. Despite stable sales in 4Q15 due to a higher share of Brazil ’s fruit market, Klabin’s
annual sales recorded a decline similar to that reported by ABPO.
In relation to industrial bags, despite the decline in the construction market, Klabin benefited from its strong
presence in Brazil’s Northeast, where demand has been higher than in the country’s other regions. The
Company’s strategy of developing new markets outside Brazil also proved successful, underlining its flexibility
in the industrial bag market as well.
However, despite the year-long decline in sales volume due to the deterioration of the domestic economy,
net revenue increased by 8% in 4Q15 and by 4% in 2015, reaching R$2,251 million, thanks to Klabin’s
improved sales mix and the devaluation of the real against the dollar.
INVESTMENTS
Klabin invested R$1.4 billion in 4Q15, led by
investments in the new pulp plant in Ortigueira (PR). Of
this total, R$114 million went to the continuity of mill
operations, R$27 million to forestry operations, R$28
million to special projects and capacity expansions, and
R$1,195 million to the Puma Project.
The construction of the new pulp line, which will add 1.5 million tonnes to the Company’s current capacity in
Ortigueira (PR), recorded substantial progress and closed the year with 95% of its works complete and 77%
of its financing disbursed. The project moved ahead precisely in line with the original schedule and budget at
the same time as the Company was recording growing results in a highly adverse scenario, underlining
Klabin’s focus and major execution capacity.
∆ ∆ ∆
4Q15/3Q15 4Q15/4Q14 2015/2014
Total conversion 176 174 176 1% 0% 690 712 -3%
R$ millionTotal conversion 586 577 544 2% 8% 2,251 2,171 4%
2015 20144Q15 3Q15thousand tonnes 4Q14
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11
CAPITAL MARKET
Shares
Klabin’s Units (KLBN11) appreciated by 61% in 2015, versus the IBOVESPA’s 13% decline. The Company’sUnits were traded in all sessions of the BM&FBovespa, totaling 1.6 million trades involving 794 million shares,
giving average daily traded volume of R$63 million at year-end.
Klabin’s capital stock comprises 4,733 million shares, 1,849 million of which common and 2,884 million
preferred. The Company’s shares are also traded on the U.S. over-the-counter market as Level 1 ADRs, under
the ticker KLBAY.
For the third consecutive year, Klabin was included in the BM&FBovespa’s Corporate Sustainability index
(ISE), which contains shares of companies recognized for their high level of commitment to the sustainability
of their businesses and the country as a whole. The companies included are selected annually, based on
criteria set forth by the Getulio Vargas Foundation’s São Paulo Business School (EAESP-FGV). Klabin will be
part of the effective portfolio until 2017.
D e c - 1 4
J a n - 1 5
F e b - 1 5
M a r - 1 5
A p r - 1 5
M a y - 1 5
J u n - 1 5
J u l - 1 5
A u g - 1 5
S e p - 1 5
O c t - 1 5
N o v - 1 5
D e c - 1 5
Performance KLBN11 x Brazilian Index (Ibovespa)
KLBN11 Ibovespa Index
100
87
161
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12
CONFERENCE CALL
Portuguese
Thursday, February 4, 2016 – 11:00 a.m. (Brasília).
Password: Klabin
Phone: (11) 3193-1133 or (11) 2820-4133
Replay: (11) 3193-1012 or (11) 2820-4012 – Password:9486655#
The conference call will also be broadcast via the internet.
Access: http://cast.comunique-se.com.br/Klabin/4T15
English (with simultaneous
translation)
Thursday, February 4, 2016 – 8:00 a.m. (EST).
Password: Klabin
Phone: U.S. participants: 1-888-700-0802
International participants: 1-786-924-6977
Brazilian participants: (55 11) 3193-1133
Replay: (55 11) 3193-1012 or (55 11) 2820-4012 – Password:4768266#
The conference call will also be broadcast via the internet.
Access: http://cast.comunique-se.com.br/Klabin/4Q15
With gross revenue of R$5.9 billion in 2014, Klabin is the largest integrated manufacturer, exporter and recycler ofpackaging paper in Brazil, with an annual production capacity of 2 million tonnes. Klabin has adopted a strategic focus onthe following businesses: paper and coated boards for packaging, corrugated boxes, industrial sacks and wood logs. It isthe leader in all of its market segments.
The statements in this earnings release concerning the Company's business prospects, projected operating and financial results and
potential growth are merely projections and were based on Management's expectations regarding the Company's future. These
expectations are highly susceptible to changes in the market, the general performance of the Brazilian economy, the industry and the
international markets, and are therefore subject to change.
http://cast.comunique-se.com.br/Klabin/4T15http://cast.comunique-se.com.br/Klabin/4T15http://cast.comunique-se.com.br/Klabin/4T15http://cast.comunique-se.com.br/Klabin/4T15
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Appendix 1Consolidated Income Statement (R$ thousands)
∆ ∆ ∆
4Q15/3Q15 4Q15/4Q14 2015/2014
Gross Revenue 1.877.204 1.719.529 1.518.233 9% 24% 6.745.775 5.900.091 14%
Net Revenue 1.595.507 1.445.697 1.257.110 10% 27% 5.687.589 4.893.882 16%
Change in fair value - biological assets 226.614 98.731 19.644 130% 1054% 536.113 924.104 -42%
Cost of Products Sold (1.063.709) (929.311) (919.770) 14% 16% (3.981.502) (3.573.609) 11%
Gross Profit 758.412 615.117 356.984 23% 112% 2.242.200 2.244.377 0%
Selling Expenses (121.389) (107.458) (95.853) 13% 27% (428.902) (379.726) 13%
General & Administrative Expenses (101.326) (78.796) (83.171) 29% 22% (338.013) (298.350) 13%
Other Revenues (Expenses) 10.369 (7.528) 42.985 N/A -76% (13.104) 84.785 N/A
Total Operating Expenses (212.346) (193.782) (136.039) 10% 56% (780.019) (593.291) 31%
Operating Income (before Fin. Results) 546.066 421.335 220.945 30% 147% 1.462.181 1.651.086 -11%
Equity pickup 6.580 10.707 14.268 -39% -54% 30.626 48.649 -37%
Financial Expenses (233.853) (235.506) (224.971) -1% 4% (848.485) (654.932) 30%
Financial Revenues 159.906 177.378 131.778 -10% 21% 581.900 535.340 9%
Net Foreign Exchange Losses 306.158 (2.431.549) (357.697) N/A N/A (3.174.030) (526.520) 503%
Net Financial Revenues 232.211 (2.489.677) (450.890) N/A N/A (3.440.615) (646.112) 433%
Net Income before Taxes 784.857 (2.057.635) (215.677) N/A N/A (1.947.808) 1.053.623 N/A
Income Tax and Soc. Contrib. (264.251) 716.802 88.306 N/A N/A 694.611 (323.293) N/A
Net income 520.606 (1.340.833) (127.371) N/A N/A (1.253.197) 730.330 N/A
- - - - -
Depreciation and amortization 268.446 185.980 295.216 44% -9% 998.727 951.965 5%
Change in fair value of biological assets (226.614) (97.754) (16.475) 132% 1276% (527.683) (920.935) -43%
Vale do Corisco 15.074 10.047 8.708 50% 73% 42.007 35.972 17%
Adjusted EBITDA 602.972 519.608 508.394 16% 19% 1.975.232 1.718.088 15%
2014(R$ thousands) 3Q15 4Q14 20154Q15
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Appendix 2Consolidated Balance Sheet (R$ thousands)
Current Assets 8,675,744 7,899,676 Current Liabilities 3,162,295 2,518,873
Cash and banks 56,511 105,794 Loans and financing 1,716,306 1,479,788
Short-term investments 4,997,212 5,140,039 Debentures 329,810 275,201
Securities 557,143 497,604 Suppliers 702,199 438,864
Receivables 1,501,099 1,148,676 Income tax and social contribution 0 0
Inventories 701,126 563,709 Taxes payable 45,400 55,137
Recoverble taxes and contributions 736,501 331,968 Salaries and payroll charges 195,349 139,879
Other receivables 126,152 111,886 Dividends to pay 0 0
REFIS Adherence 61,772 50,400
Noncurrent Assets 17,592,436 13,274,179 Other accounts payable 111,459 79,604
Long term
Taxes to compensate 1,159,638 428,884 Noncurrent Liabilities 17,753,545 11,596,659
Judicial Deposits 77,391 84,689 Loans and financing 14,834,935 8,160,320
Other receivables 219,820 236,050 Debentures 1,140,679 1,070,263
Other investments 507,275 494,747 Deferred income tax and social contribution 954,269 1,699,823
Property, plant & equipment, net 12,009,146 8,351,387 Other accounts payable - Investors SCPs 143,116 131,526
Biological assets 3,606,389 3,667,085 REFIS Adherence 361,240 384,607
Intangible assets 12,777 11,337 Other accounts payable 319,306 150,120
Stockholderś Equity 5,352,340 7,058,323
Capital 2,383,104 2,271,500
Capi tal res erve 1,293,962 1, 295, 919
Revaluation reserve 48,705 48,767
Profit res erve 748,162 2,534,302
Valuation adjustments to shareholders'equity 1,064,181 1,065,446
Treasury stock (185,774) (157,611)
Total 26,268,180 21,173,855 Total 26,268,180 21,173,855
Assets Dec-15 Dec-14 Liabilities and Stockholders' Equity Dec-15 Dec-14
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Local currency : R$ 5.7 billion Average tenor: 42 months
Foreign currency: R$ 12.3 billion Average tenor : 54 months
ForeignCurrency12,343
LocalCurrency5,679
Gross Debt18,022
R$ million
409326
75168
978
809884
583
1,021
490370
319 2240
302502
138126
1,068
1,6491,655
1,6211,591
1,155
870
330
2,200
203
711828
213294
2,046
2,458 2,539
2,204
2,612
1,645
1,240
649
2,424
1Q16 2Q16 3Q16 4Q16 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025/26
Appendix 3Loan Maturity Schedule – 12/31/2015
R$ million 1Q16 2Q16 3Q16 4Q16 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025/26 TotalBNDES 106 85 75 91 356 484 468 404 290 239 234 230 185 0 2,891
Others 212 34 - 46 292 27 179 117 280 190 105 89 39 0 1,318
Debentures Interests 92 207 0 31 330 297 238 62 451 62 31 0 0 0 1,470
Local Currency 409 326 75 168 978 809 884 583 1,021 490 370 319 224 0 5,679
Trade Finance 210 487 60 116 873 1,354 1,343 1,300 1,288 871 598 65 - - 7,692
Fixed Assets 28 13 10 8 59 157 174 183 173 155 144 137 126 12 1,321
Bonds46 - - - 46 - - - - - - - 1,946 - 1,992
ECA's 18 2 68 2 91 138 138 138 131 128 128 128 128 191 1,338
Foreign Currency 302 502 138 126 1,068 1,649 1,655 1,621 1,591 1,155 870 330 2,200 203 12,343
Gross Debt 711 828 213 294 2,046 2,458 2,539 2,204 2,612 1,645 1,240 649 2,424 204 18,022
Local Currency 12.4 % p.y. 42 months
Foreign Currency 4.7 % p.y. 54 months
Gross Debt 50 months
Average Cost Average Tenor
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Appendix 4Consolidated Cash Flow Statement (R$ thousands)
Cash flow from operating activities 442,948 442,944 1,739,996 1,555,391
Operating activities 458,153 679,754 2,167,727 2,208,713
. Net income 520,606 (127,371) (1,253,197) 730,330
. Depreciation and amortization 82,600 82,481 313,424 277,783
. Deferred income taxes and social contribution (226,614) (19,644) (536,113) (924,104)
. Depletion in biological assets 185,846 212,735 685,303 674,182
.Income taxes and social contribution 244,003 (46,283) (724,821) 477,464
. Interest and exchange variation on loans and financing (201,178) 601,360 4,004,843 1,262,068
. Payment of interest on loans (177,934) (102,532) (765,019) (392,969)
. Interest, exchange variation and profit sharing of debentures 46,737 60,709 416,815 85,744
. Variation of the present value of debentures 10,219 14,899 40,891 51,596
. REFIS Reserve 12,632 14,126 47,653 46,263
. Equity results (10,741) (25,025) (6,910) (33,288)
. Results on Equity Pickup (5,595) (14,268) (29,641) (48,649)
.Income taxes and social contribution - (1,573) (16,326) (11,052)
. Others (22,428) 30,140 (9,175) 13,345
Variations in Assets and Liabilities (15,205) (236,810) (427,731) (653,322)
. Receivables (125,014) (15,683) (352,423) (1,469)
. Inventories (37,509) (31,040) (137,417) (67,857)
. Recoverable taxes (181,786) (151,296) (1,118,961) (506,066)
. Marketable Securities (18,078) (13,386) (59,539) (248,093)
. Prepaid expenses (3,315) (9,153) 1,818 47
. Other receivables (22,283) (31,356) (53,057) (26,511)
. Suppliers 371,805 46,770 1,081,199 232,918
. Taxes and payable (4,841) (1,790) (9,737) (6,370)
. Salaries, vacation and payroll charges (10,964) (3,579) 55,470 12,523
. Other payables 16,780 (26,297) 164,916 (42,444)
Net Cash Investing Activities (1,352,275) (907,588) (4,595,526) (2,909,308)
. Purchase of property, plant and equipment (1,335,913) (885,268) (4,526,734) (2,842,350)
. Cust biological assets planting (ex taxes) (27,925) (31,403) (100,471) (103,085)
. Income of assets sale 2,122 6,533 14,672 18,277
. Sale of property, plant and equipment 9,441 2,550 17,007 17,850
Net Cash Financing Activities 592,501 (100,607) 2,663,420 3,869,878
. New loans and financing 1,075,783 235,664 4,925,579 2,837,527
. Debentures capitalization - - - 2,470,151
. Debentures interest payment - - (342,486) -
. Loan amortization (356,800) (246,046) (1,514,105) (1,104,217)
. Dividends payed (105,010) (89,985) (377,995) (332,054)
. Stocks repurchase (21,472) - (32,623) (5,822)
. Stocks disposal - - 5,263 5,391
. Minority shareholders entry - - - -
. Minority shareholders exit - (240) (213) (1,098)
Increase (Decrease) in cash and cash equivalents (316,826) (565,251) (192,110) 2,515,961
Cash and cash equivalents at beginning of period 5,370,549 5,811,084 5,245,833 2,729,872
Cash and cash equivalents at end of period 5,053,723 5,245,833 5,053,723 5,245,833
2015 20144Q15 4Q14