Suzano S.a. · BMFBOVESPA:SUZB3
Suzano — Suzano Papel e Celulose — Q3 2016 Earnings Presentation
14 slides from Suzano's earnings presentation, October 2016
Slide 1: 3Q16 Results
SUZANO PAPEL E CELULOSE 3Q16 Results oY Rees T
Slide 2: Disclaimer
Disclaimer The statements in this presentation constitute projections or forward-looking statements. Such statements are subject to known and unknown risks and uncertainties that could cause the expectations expressed to not materialize or the actual results to differ materially from the expected re
Slide 3: Return on Invested Capital (ROIC) as managed indicator
Return on Invested Capital (ROIC) Operating Cash Generation¹ LTM² INDICATOR USED TO (R$ billion) MANAGE 3.5 3.7 3.8 3.1 S U Z A N O WHICH MAIN DRIVER IS 1.5 Operating Cash Generation Dec/14 Dec/15 Mar/16 Jun/16 Sep/16 Adjusted EBITDA LTM² (R$ billion) 4.6 4.9 4.9 4.2 2.5 Dec/14 Dec/15 Mar/16 Jun/16
Slide 4: 3Q16 Results: Lower Pulp Production
3Q16 RESULTS Lower Pulp Production Scheduled maintenance downtimes (Mucuri and Suzano) Slower Production Pace (Imperatriz) External Factors Lower _ Inadequate return (pulp price) pulp sales _ Operational issue FX Pulp volume Price Delay in Shipment Volumes booked in 4Q16
Slide 5: 3Q16 Results: paper and pulp demand and cash cost
3Q16 RESULTS Brazilian Positive results Market share 4% price increase in demand in paper segment gain in domestic Latin America (ex weakening in the domestic market, with flat Brazil) effective as of PAPER market prices October 2016 Healthy Announcement of list price demand increase in China to PUL
Slide 6: Additional Pulp Supply Threatens Industry's Returns
ADDITIONAL PULP SUPPLY THREATENS INDUSTRY'S RETURNS Supply Cost Capital Financial Product Discipline Discipline Discipline Discipline Portfolio R E S I L I E N T B A L A N C E S H E E T A N D R E S U L T S 6
Slide 7: Supply Discipline
Supply Discipline SUZANO IS MANAGED BASED ON RETURN ON INVESTED CAPITAL (ROIC), NOT EBITDA POSTPONEMENT OF PROJECT 5.1 in Mucuri to 2018 Return from capacity expansion affected by market conditions P O T E N T I A L PRODUCTION ADJUSTMENT in 2017 based on market conditions
Slide 8: Cost Discipline: Efficiency Gains
Cost Discipline SG&A / Sales COGS / Sales Volume Volume (R$/ton) (R$/ton) EFFICIENCY INFLATION: +8.5% GAINS INFLATION: +8.5% +0.1% +5.2% ALLOW FOR THE 177 178 EVOLUTION OF 1,330 1,399 COSTS BELOW 9M15 9M16 INFLATION 9M15 9M16
Slide 9: Cost Discipline: Wood Supply in Imperatriz Mill
Cost Discipline REDUCTION IN STRUCTURAL COST WOOD SUPPLY IN IMPERATRIZ MILL Acquisition of Land and ADVANTAGES Forests: US$ 245 million Shorter average distance and Reduction in Forest higher supply from own forests CAPEX over coming years 75 k ha of Total Area 40 k ha of Planted Area Potential demo
Slide 10: Capex Flexibility
Capital Discipline CAPEX FLEXIBILITY 2017 estimated Capex 2016 revised Capex R$ billion Sustaining 1.1 R$ 2.4 bi > R$ 2.1 bi > R$ 1.9 bi Project 5.1 0.3 Adjacent Businesses 0.2 Project 5.1 revised Capex Others 0.1 Subtotal 1.7 R$ 1.14 bi > R$ 0.9 bi Acquisition of Land and Forests 0.8 Total 2.5
Slide 11: Financial Discipline: Robust Balance Sheet
Financial Discipline ROBUST B A L A N C E S H E E T prepares Suzano for the future Dollarization of 100% of Dividends based on Net Debt cash generation Higher Liquidity Nominal reduction in (R$4 billion in cash) with Net Debt low financing cost (4.6% p.a.) Leverage¹ affected by lower EBITDA Lengthen
Slide 12: Products Portfolio: Lower Volatility
Products Portfolio LOWER VOLATILITY OF PAPER SEGMENT SUPPORTS MORE RESILIENCE OF CASH GENERATION Suzano’s Average Net Price (R$/ton) 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 Pulp Paper
Slide 13: Cash Flow Yield Is the Best Indicator
CASH FLOW YIELD¹ IS THE BEST INDICATOR TO COMPARE VALUE CREATION FOR SHAREHOLDERS ... And Suzano has been posting the best number in the industry: 14.3% 2 ¹ Operating Cash Generation LTM/EV ² Data from 09/30/2016
Slide 14: Better Everyday, Strong and Kind
BETTER EVERYDAY STRONG AND KIND www.suzano.com.br/ir [email protected]
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