Suzano S.a. · BMFBOVESPA:SUZB3
Suzano — 4Q16 Earnings Presentation
14 slides from Suzano's earnings presentation, February 2017
Slide 1: 4Q16 Results
S) SUZANO PULP AND PAPER 4Q16 RESULTS
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 not to materialize or the current results to differ materially from the expected
Slide 3: Improvements in operating performance guarantee robust operating cash flow
Improvements in operating performance guarantee robust operating cash flow Operating Cash Flow¹ (R$ billion) 3.5 2.7 1.5 1.1 2013 2014 2015 2016 Sustaining Capex 0.67 1.00 1.11 1.16 Adjusted EBITDA 1.78 2.45 4.59 3.91 ¹ Operating Cash Flow = Adjusted EBITDA – Sustaining Capex
Slide 4: Pulp: Record high production and sales volume in 2016
Pulp Record high production and sales volume in 2016 Pulp Production (‘000 tons) Pulp Sales (‘000 tons) 3,373 3,473 3,291 3,530 843 809 935 756 957 740 4Q15 3Q16 4Q16 2015 2016 4Q15 3Q16 4Q16 2015 2016 Increase of export volume in all Production increase in all facilities regions Debottlenecking of
Slide 5: Target Pulp Cash Cost for 2018 reached in 4Q16
Target Pulp Cash Cost for 2018 reached in 4Q16 Normalized wood supply at Mucuri mill Industrial retrofits allowed record high production volume Consolidated Pulp Cash Cost (R$/ton) and cost reduction 642 623 Estimated Target Cash Cost 570 570 475 2015 4Q16 2016 2017 2018¹ 2021 – 2022¹ ¹Nominal value
Slide 6: External factors impact pulp profitability
Pulp Adjusted EBITDA (R$/ton) 1,328 1,109 External factors 678 778 impact pulp profitability 4Q15 4Q16 2015 2016 802 655 784 696 Average Europe FOEX 623 506 641 517 Average China FOEX 3.84 3.29 3.33 3.49 Average R$/US$ Pulp Operating Cash Flow¹ (R$/ton) Pulp ROIC (%) 1,027 15.7% 834 1,027 15.7% 10.5
Slide 7: Paper: Improvements in tight market
Paper Improvements in tight market Paper Production¹ (‘000 tons) Paper Sales¹ (‘000 tons) 1,185 1,194 1,164 1,182 399 360 273 292 295 315 309 317 786 834 100 81 91 215 228 226 4Q15 3Q16 4Q16 2015 2016 4Q15 3Q16 4Q16 2015 2016 Brazil Exports Sales volume increase in Brazil, Positive results with the
Slide 8: Relevant developments in cash generation and profitability
Relevant Paper Adjusted EBITDA (R$/ton) developments in cash generation 743 796 768 970 and profitability 4Q15 4Q16 2015 2016 Paper Operating Cash Flow (R$/ton) Paper ROIC (%) 15.6% 803 592 613 604 11.8% 9.3% 4Q15 4Q16 2015 2016 2014 2015 2016 ¹ Operating Cash Flow = Adjusted EBITDA – Sustaining Cap
Slide 9: Continuous focus on cost and expense discipline
Continuous focus on cost and expense discipline Revenue (R$ million) Operating Cash Flow¹ (R$/ton) 10,224 9,882 771 7,265 581 348 2014 2015 2016 2014 2015 2016 SG&A (RS/ton) COGS (R$/ton) Inflation: +17.6% Inflation: +17.6% +6.6% +8.4% 191 1,368 1,391 166 177 1,283 2014 2015 2016 ¹ Operating Cash Fl
Slide 10: Capital discipline and flexibility in investments
Capital discipline and flexibility in investments CAPEX (R$ billion) Major Projects in 2017: 2016 2017e Debottlenecking of Imperatriz (to be completed) Sustaining 1.16 1.11 Tissue production Lignin production Structural Competitiveness 0.69 0.72 e Adjacent Businesses Subtotal 1.85 1.83 Acquisition o
Slide 11: Financial strength seeks Investment Grade
Financial strength seeks Investment Grade Financial Discipline: Debt / Adjusted EBITDA (x) Appropriate level of leverage 5.6x 4.1x Liability management actions for cost 3.6x 3.2x reduction and/or lengthening of the 2.7x 2.6x average term Capital Discipline: Dec/14 Dec/15 Dec/16 Dividends based on op
Slide 12: Significant results in 2016...
Significant results in 2016... Strong operating cash flow and results Cash Cost: lower wood cost and benefits from industrial retrofitting Cost and expenses discipline: variation below inflation Capex discipline: investments lower than initial budget Pulp: record high production and sales Paper: pro
Slide 13: ...and there is more to come in 2017
...and there is more to come in 2017 Balance sheet strengthening to pursue Conclusion of Imperatriz Unit debottlenecking Continuous focus on cost and expense reduction Forest: average distance reduction and yield increase Startup of Tissue and Lignin production Higher Eucafluff® volumes
Slide 14: New digital platforms
New digital platforms Check out the new Investor Relations website and the new app "RI Suzano" www.suzano.com.br/ir [email protected]