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1
Deutsche Bank Global Emerging Markets ConferenceSeptember 15-17, 2010 – New York
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Disclaimer
The information contained in this presentation may include statements which constituteforward-looking statements, within the meaning of Section 27A of the U.S. Securities Actof 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 anduncertainty with respect to business, financial, trend, strategy and other forecasts, andare based on assumptions, data or methods that, although considered reasonable by thecompany at the time, may turn out to be incorrect or imprecise, or may not be possible torealize. The company gives no assurance that expectations disclosed in this presentation
2
will be confirmed. Prospective investors are cautioned that any such forward-lookingstatements 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 businessand other risks referred to in the company’s filings with the CVM and SEC. The companydoes 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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Agenda
The Company
Market Positioning
Pulp and Paper Market
4
8
15
3
2Q10 Financials
Synergies
Corporate Restructuring
22
26
28
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4
The Company
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VCP and Aracruz merged to create Fibria
Shareholder Structure
VotorantimIndustrial S.A. BNDESPar Free Float
29.34% 30.42%1 40.17%
Treasury
0.07%
5
Veracel
50.0%50.0%
Conpacel
1 Position as of August 31, 2010. BNDESPar has 21% linked to a Shareholder’s Agreement with Votorantim Industrial S.A. during the first 3 years and 10.9% during the following 2 years.
NYSE"FBR"
42%BOVESPA
"FIBR3"58%
Average Trading Volume (2Q10):
US$68 million / day
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Improved Corporate Governance
Migration to BMF&Bovespa's
Novo Mercado Listing Segment:
- 100% tag along rights
- Independent members in the Board
- One class of share: 1 share = 1 vote
Policies approved by the
Board of Directors:- Corporate Governance
- Information Disclosure
- Stocks Trading
Accessibility to Management
by Financial Communities
6
Listed in the Most Important
Sustainability Indexes:
DJSI / ISE
Adoption of International
Accounting Practices
Investor Relations Awards:- Top 5 in Financial Disclosure (Latam)
- Top 5 in Best Corporate Sustainability
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Improved Corporate Governance
9 Members: 20% Independent
Chairman: José Luciano Penido
Board and Committees
Board ofDirectors
ShareholderMeeting
Fiscal Council
7
CEO: Carlos Aguiar
Audit and Risks
Personnel and Remuneration
Finance
Sustainability
BoardAdvisory
Committees
ExecutiveOfficers
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Market Positioning
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Creation of a Winning Player
Competitive StrengthsSuperior Asset Combination
Leadership in MarketPulpScale and Integrated
Operations
Low ProductionCost DNA
Caravelas
BelmonteVeracel
Port Terminal
Pulp Mill
Paper Mill
9
• Pulp production capacity: 5.4 million t / year
• Paper production capacity: 358 thousand t / year
• Total area: 1.0 million ha1|Eucalyptus plantation: 585 thousand ha1
• 4 pulp plants; 2 paper plants and operation of 3 port terminals
• High yield in eucalyptus production (avg 45 m3 /ha/year) and certified forests – Short harvest cycle: 6 years vs. 25-70 years in Scandinavia
1 Data as of June 30, 2010. Does not include partnership program which represents 125 thousand ha.
Unique Forestry
Management:Advanced Forestry Techniques and
Short Harvest Cycle
Forest to PortIntegration TroughEfficient Logistics
Strong / ReliableCustomer Base
Modern IndustrialPlants
Três Lagoas
Conpacel
SantosJacareíPiracicaba Aracruz
Portocel
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Fibria has the best sites ready to duplicate capacity
5,400750
1,500
1,500
1,500 10,650
Veracel IITrês Lagoas II
Losango
Aracruz IV
Capacity expansion ('000 t) Status of expansion projects
Três Lagoas II
Capacity: 1.5 million tonsForest base:
- Need: 150,000 ha-TLS I surplus: 30,000 ha
- Leasing: 45,000 ha in 2010
11
Fibria 2010 Brownfield Brownfield Greenfield Brownfield Fibria 2025
Social-environmental licensing process initiatedFeasibility study to start in 2011Startup slated for 2014
Veracel II
Capacity: 1.5 million tonsNegotiations with partner in progress
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TembecBotniaSodraCMPCAPRILArauco
Fibria
Leadership in the Global Market Pulp Sector
Pulp Production Capacity
2009 ('000 t)
1st
~ Twice the size
5,400
Market Share 1
3%11%
12
0 1.000 2.000 3.000 4.000 5.000 6.000
Stora EnsoCenibra
West FraserMercer
ENCEGeorgia Pacific
IlimIP
DomtarCanfor
APPWeyerhaeuser
Bleached Hardwood Kraft Pulp (BHKP)
Bleached Softwood Kraft Pulp (BSKP)Unbleached Kraft Pulp (UKP)Mechanical
Source: PÖYRY, 2007 / As for Market Pulp: Pulp and Paper Products Council (PPPC) 2009 and Fibria.1 Market Share estimated considering 2009 nominal capacity
Total Pulp:188 million t
Total Hardwood Pulp:25 million t
Total Market Pulp:48.5 million t
Total Eucalyptus Pulp:17 million t
22%
32%
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Low Production Cash Cost DNA
Cash Cost 1 – US$/t
284 310
320225 199
152 113
238 161
118133 151 155
468437
436 423
475
416 393
296266 255 2502
Hardwood Cash Cost (US$/t) vs Capacity ('000 t)
300
400
500
600
US$/ton
Iberia
13
155238
178232
178133 104 95
Wood Others
Iberia
1 Source: Hawkins Wright Estimate 2Q102 Fibria 2Q10 Cash cost without downtimes
0
100
200
0 2.000 4.000 6.000 8.000 10.000 12.000
250
Capacity ('000 t)
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15
Pulp and Paper Market
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Shipments to Capacity Ratios and Inventories
World P&W paper shipments to capacityWorld market pulp shipments to capacity
88%
82%
88%
82%
78%
90%
79%
90%92%
95%
86%
93%90%91%
92%
89%89%89%
86%
94%96%
92%
85%
93%
85%
0 8
0 8
0 8
0 8
0 8
0 8
0 9
0 9
0 9
0 9
0 9
0 9
0 9
0 9
0 9
0 9
0 9
0 9
1 0
1 0
1 0
1 0
1 0
1 0
1 0
92%90%
87%
95%
91%
85%
79%
76%
79%80%80%78%
82%83%81%
89%88%88%
84%82%
88%89%
88%86%
85%
8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9 9 9 1 0
1 0
1 0
1 0
1 0
1 0
1 0
16
J u
l -
A u g -
S e p -
O c t -
N o v -
D e c -
J a n -
F e
b -
M a r -
A p r -
M a y -
J u n -
J u
l -
A u g -
S e p -
O c t -
N o v -
D e c -
J a n -
F e
b -
M a r -
A p r -
M a y -
J u n -
J u
l -
J u l -
A u g -
S e p -
O c
t -
N o v -
D e c -
J a n -
F e
b -
M a r -
A p r -
M a y -
J u n -
J u l -
A u g -
S e p -
O c
t -
N o v -
D e c -
J a n -
F e
b -
M a r -
A p r -
M a y -
J u n -
J u l -
World pulp consumers' days of supplyWorld pulp producers' average days of supply
Source: PPPC Global 100 – Chemical Market Pulp Source: PPPC Global 100 – P&W
Source: PPPC Global 100 – Total Chemical Pulp Producers' stock
2015
20
25
30
35
A p r - 0
5
N o v - 0
5
J u n - 0
6
J a n - 0
7
A u g - 0
7
M a r - 0
8
O c t - 0
8
M a y - 0
9
D e c - 0
9
J u l - 1
0
29
10
20
30
40
50
A p r - 0
5
N o v - 0
5
J u n - 0
6
J a n - 0
7
A u g - 0
7
M a r - 0
8
O c t - 0
8
M a y - 0
9
D e c - 0
9
J u l - 1
0
d a y s
d a y s
Source: PPPC Global 100 – Total Chemical Pulp Consumers' stock
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Industry Outlook
China: Eucalyptus pulp shipments ('000 t)Market pulp: world demand growth (%)
264196204
161128 151
268
495
296356
518
412
340355 350363
293266
331
280210
276267191
235251203
- 0 8
- 0 8
l - 0 8
- 0 8
- 0 8
t - 0 8
- 0 8
- 0 8
- 0 9
- 0 9
r - 0 9
r - 0 9
- 0 9
- 0 9
l - 0 9
- 0 9
- 0 9
t - 0 9
- 0 9
- 0 9
- 1 0
- 1 0
r - 1 0
r - 1 0
- 1 0
- 1 0
l - 1 0
0%
9% 10%
18%15%
-27%Total North America Europe Latin America Japan China
Average240 ktons
Average347 ktons Average
233 ktons
17
M a
J u J u A u
S e O
u N o
D e
J a F e
M a
A p
M a
J u J u A u
S e O
c N o
D e
J a F e
M a
A p
M a
J u J u
Announced list pulp priceEuropean List Price (BHKP) x Commodity Index (CRB)
Source: Fibria
Source: PPPC Global 100 – World Chemical Market Pulp Source: PPPC Global 100
7M2010 x 7M2009
List price (as of September/2010):
• North America: US$900/t• Europe: US$870/t• Asia: US$800/t
Source: CRB (Commodity Research Bureau) – Bloomberg | BHKP: FOEX
US$840/tUS$920/t
300400500600700800
9001.000
250
350
450
550
J a n - 0
8
M a r - 0
8
M a y - 0
8
J u
l - 0 8
S e p - 0
8
N o v - 0
8
J a n - 0
9
M a r - 0
9
M a y - 0
9
J u
l - 0 9
S e p - 0
9
N o v - 0
9
J a n - 1
0
M a r - 1
0
M a y - 1
0
J u
l - 1 0
CRB BHKP List Price
E u r o p e a n
L i s t P r i c e
( U S $ / t ) –
B H K P
C o m m o
d i t y P r i c e
I n d e x
( C R B )
A u g - 1
0
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24.8
28.3
1.6
1.4 0.2 0.330.1
28.0
1.3
0.6 0.3 -0.1
Asia4.5% p.a.
Europe5% p.a.
USA2% p.a.
Others
2% p.a.
Expected Supply x Demand Balance 1 – Market Pulp BHKP (million t)
Rizhao(3Q10/2011) FibriaTLS (2010) JBS
Eldorado(4Q12)
Others2
Pulp Supply x Demand Balance Expected to Remain Tight
18
2009 BHKPDemand
Asia Europe USA Others 2012 BHKPDemand
2009 BHKPDemand
Asia Europe USA Others 2012 BHKPDemand
2009 BHKPDemand
2009 BHKPSupply
OR 3:94%
OR 3:89%
2012 BHKPDemand
2012 BHKPSupply
1 Source: PPPC / Fibria2 Capacity changes3 OR: Operating rate
+3.5 MT +2.1 MTDemand Supply
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P&W Capacity Changes
Company / Mill Effective Date '000 t
Puyang Longfeng Jan 2009 350
Tralin, Gaotang Feb 2009 150
MCC Yinhe Paper Jul 2009 200
Yeuyang Paper Oct 2009 200
Fujian Nanping Paper Oct 2009 200
Yeuyang Paper 2010 200
Fujian Nanping March 2010 100
Sun Paper/IP March 2010 350
2009 = 1.1 million t
Company Region/Date '000 t
M Real Europe/2009 320
International Paper Europe/2009 250
Others Europe/2009 455
International Paper North America/2009 200
Others North America/2009 230
Stora Enso Europe/2010 210
2009 = 1.5 million t
P&W paper capacity withdrawals 2009-2010 1 China: P&W paper capacity changes 2009-2013 1
19
Guangxi Yongkai Sugar April 2010 200
APP, Hainan Island May 2010 1,200
Lee&Man 1H 2010 200
Jiangsu Oji Paper Q32010 400
Shandong Huatai late 2010 150
Guangxi Jindaxing December 2010 200
Guangxi Yongkai Sugar 2011 200
China Metalurgical Meili Paper Q1 2011 300
Shandong Huatai Paper Q1 2011 500
Shandong Chenming Q1 2011 1,250
Guangxi Huajin Group late 2011 340
Sun Paper Q1 2011 300
Nine Dragons late 2011 450
April early 2012 450April early 2013 450
Total P&W capacity changes in China 8,400
2010 = 3.1 million t
2011 = 3.3 million t
Others Europe/2010 80Domtar North America/2010 415
International Paper North America/2010 340
Others North America/2010 280
Total P&W capacity withdrawals in Europeand North America
3,000
2010 = 1.5 million t
1 Source: TerraChoice July 2010
2012-13 = 0.9 million t
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China’s Presence in the Market Pulp Sector
+59%
+107%3.000
4.000
5.000
6.000
7.0002008 2009 Growth
China's Hardwood imports of BHKP by country 1 China's share of market pulp (%) 2
26%22%
10%
12%14%
21%
6.000
8.000
10.000Eucaplyptus Hardwood Total
‘ 0 0 0 t
‘ 0 0 0 t
Pulp Shipments (‘000) and Market Share (%)
20
+2%
+51%+12%
+117%+38% +151%+142% +2%
0
1.000
2.000
B H K P T o
t a l
B r a z i l
I n d o n e s i a
C h i l e
R u s s i a
U r u g u a y
C a n a
d a
U S A
O t h e r s
T h a
i l a n
d
Brazil is the leading exporter of BHKP toChina, accounting to approximately 41% ofChina's total imports in 2009.
Between 2005 and 2009, the Chinese marketshare of eucalyptus shipments increased by17 p.p. (total market pulp: +11 p.p.)
2 Source: PPPC – W20. Coverage for chemical market pulp is 80% of world capacity.
9% 11% 13%16%
7% 9%10% 12%
0
2.000
.
2005 2006 2007 2008 2009
1 Source: Hawkins Wright
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10
15
20
25
30
China Paper&Board Production and Consumption 1 Per Capita Consumption of Tissue by World Region 2
Kg / capita
20
30
40
50
60
70
40
60
80
100
120
Benefiting From China’s Growth
in million tons kg/person/yr
21
0North
AmericaWest
EuropeJapan Oceania LatAm East
EuropeChina Africa
1 Source: China Paper Association.
0
10
0
20
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Consumption Production Per Capita
Chinese consumption of high quality tissue paper has a huge potential upside, as GDP per capitaincreases.
2 Source: RISI
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2Q10 Financials
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2Q10 Performance
Pulp sales mixKey figures
2Q10 1Q10 2Q09 2Q10 vs1Q10
2Q10 vs2Q09
Pulp Production (1000t) 1,208 1,314 1,334 -8% -9%
Pulp Sales (1000t) 1,253 1,322 1,349 -5% -7%
Paper Producton (1000t) 79 77 94 3% -16%
Paper sales (1000t) 87 83 104 6% -16%
Net Revenue (R$ million) 1,809 1,675 1,471 8% 23%
Adjusted EBITDA (R$ million) 730 637 389 15% 87%
EBITDA Mar in % 40% 38% 26% 2 . . 14 . .
21%
32%
37%
9%
2Q09
27%
39%
23%
11%
1Q10
North America Europe Asia Brazil/Others
27%
38%
24%
11%
2Q10
23
EBITDA (R$ million) and EBITDA Margin (%)Cash cost (R$/t)
389
637
730
2Q09 1Q10 2Q10
. . . .
Financial Income (R$ million) (315) (341) 1.369 - -
Net Income (R$ million) 130 9 920 1,341% -86%
26%
38% 40%
418
499
440
1Q10 2Q10 2010E
449
2Q10 w/odowntimes
Source: Fibria
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Financial Turnaround
Liability Management
Achievements 2Q09 2Q10
Leverage (Net Debt / EBITDA) 7.2x 4.7x
Cost of Foreign Debt 7.1% p.a. 6.0% p.a.
Average Maturity (months) 47 70
Collateral Debt (% of total debt) 43% 16%
Access to Capital Markets Amount
Eurobond Fibria 2019 @ 9.25% p.a. US$ 1 bi
Eurobond Fibria 2020 @ 7.5% p.a. US$ 750 mi
Pre Export Payment @ 3month Libor + 4.00% p.a.(tranche 1) US$ 750 mi
Pre Export Payment @ 3month Libor + 4.25% p.a. (tranche 2) US$ 425 mi
25
Derivatives debt US$ 2.6 bi -
Net Debt R$ 13.2 bi R$ 10.8 bi
Pre Export Payment @ 3month Libor + 2.8% p.a. US$ 600 mi
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26
Synergies
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Synergies
Net Present Value of the synergies (R$ billion)
3,4
4,2 4,3 4,52Q10 status:108% of the
projected curve
27%21%
2% Industrial- Cost reduction ofchemicals and energy
Supply Chain- Reduction of shipping cost
- Optimization of logistics
Others
2.0
27
Accumulated Estimated
0.5
1.4
,
dec/09 2Q10 dec/10 2011 2012 2013 2014
23%16%
11% - Production increase
Forestry- Reduction of forestry costs
- Best practices in R&D
SG&A
Tax
0.5
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Corporate Restructuring
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Corporate Restructuring
Event Date
Acquisition by VCP of additional 28% of Aracruz common shares Jan 20, 2009
VCP Capital Increase Apr 14, 2009
VCP conversion of prefered into common shares Jun 12, 2009Tender Offer for Aracruz common shareholders Jul 02, 2009
Incorporation proposal for the 0.1347 ratio Aug 24, 2009
29
,
Shareholderes Agreement - VID and BNDES Oct 29, 2009
End of withdrawal rights period Nov 12, 2009
End of Aracruz trading Nov 17, 2009
Fibria trading start (Bovespa: FIBR3 / NYSE: FBR) Nov 18, 2009
Approval of the merger of Aracruz into Fibria Dec 22, 2009
Migration to Novo Mercado listing segment at BM&FBovespa May 20, 2010
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3030
Investor Relations Team:
João Elek – IROAndré Gonçalves – General Manager
Fernanda Naveiro VazAnna Laura LinkewitschRoberto Costa
Phone: +55 11 2138-4565
Email: [email protected]
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