2. Disclaimer
Certain statements in this presentation may constitute forward-looking
statements. Such statements are subject to known and unknown risks and
uncertainties that could cause the Company’s actual results to differ materially
from those set forth in the forward-looking statements. These risks include
changes in customer demand for the Company’s products, changes in raw
material costs, seasonal fluctuations in customer orders, pricing actions by
competitors, significant changes in the applicable rates of exchange of the
Brazilian real against the US dollar, and general changes in the economic
environment in Brazil, emerging markets or internationally.
2
3. Agenda
Corporate Overview 4
Forestry Business Unit12
Pulp Business Unit 19
Paper Business Unit 27
Results 35
New Growth Cycle 42
3
5. Suzano Pulp and Paper
Ownership and Management
Defined controlling • Second largest eucalyptus pulp
group producer in the world and one of
• Reputation
• Long term vision the top 10 market pulp producers.
• Leader in the regional paper
market
• Certified plantations and products.
Capital markets
• Management performance • New growth cycle: from 2.8 to 7.2
assessment million tons per year of paper and
• Transparency
• Funding for growth pulp.
• Pulp production costs: one of the
lowest in the world.
• Solid business structure abroad.
Professional • Capital markets presence: free
management
• Capital discipline float of 46%.
• Rapid decision-making
process
5
6. Diversified products and markets
Balanced and complementary portfolio
Papers (61% of net revenue)
Market pulp Printing and Writing (48% of net revenue)
(39% of net rev.) Paperboard
Uncoated Coated (13% of net rev.)
(41% of net rev.) (8% of net rev.)
2nd largest 2nd in Brazil 1st in Brazil 1st in Brazil
eucalyptus pulp
Market share: 26% Market share: 22% Market share: 27%
producer in the world
R$ 4.0 billion in net revenue
58% in exports / 42% in domestic market
Note: Market share figures include paper imports. Last twelve months until September, 2009.
6
7. Sustainable growth
Suzano’s production capacity has increased by 130% 7,150
in the last five years. The Company is prepared for a New unit
and Mucuri
new growth cycle that will increase its capacity to 7.2 expansion
million tons per year of pulp and paper.
Piauí Unit
Maranhão Unit
2,750 2,850
1,920
1,485 1,720
1,200 1,240
Note: The effective capacities will depend on the learning curves.
7
8. Corporate structure
BD committees
Management
Board of Directors (BD) Sustainability and
The Business Units model
provides performance and 9 members (4 independent) Strategy
returns assessments in each
business Audit
CEO
SP Operations Forestry BU Pulp BU Paper BU
SP Strategy, BU: Business Unit
Corporate Dev. and IR
SP Finance Objectives:
SP Human
• Greater focus on customers
Resources • Improved accountability
• Development of leaders
SP: Service Providers
8
9. Management model
Operational Excellence Alignment of Interests
• Six Sigma • Executives compensation based on
• Routine management EVA metrics
• Matrix budgeting • Higher variable portion in total
compensation
Corporate Risk Management Strategic Planning
• COSO1 methodology • Focused on Value Based
• Corporate governance structure Management (VBM)
based on committees – direct report • Innovation and R&D
to the directors and Board. • Sustainability
Awards and Certifications
¹Internal control methodology of the Committee of Sponsoring Organizations of the Treadway Commission
9
10. Sustainability
Triple Bottom Line – GRI approach
Financial and Economic
• Growing scale and revenues
• Improving margins and returns
• Solid cash flow generation
Social
Environment • Focus on education:
• FSC – forest management and custody – Public libraries
chain management – Public schools remodeling
• CCX e WBCSD member – Educational programs
• ECOFUTURO (Parque das Neblinas) (with ECOFUTURO)
FSC – Forest Stewardship Council
CCX – Chicago Climate Exchange WBCSD - World Business Council for Sustainable Development 10
11. Growth platform
Consolidated
presence in the Consolidated
New growth
Competitive main pulp
cycle with management
assets with markets and
competitive structure and
global scale leader in the
regional paper projects model
market
Qualified team that combines diversity and focus on execution
11
13. Forestry competitiveness
Brazil: high productivity,
forestry technology, low
production costs and
available areas for
expansion
Forest Planted Planted Planted Native
Harvest cycle
7 8 12 80
(years)
Indonesia, Spain, Canada,
Malaysia Portugal, Finland
Main producers Brazil
and Chile and and
Vietnam Uruguay Sweden
13
14. Evolution with state-of-the-art technology
Forest yield evolution (m³/ha/year)
Technology innovation Clones
Monoprogeny planting Biotechnology
Soils and nutrition
• More wood/ ha 44
Classic
• More pulp/ m 3 improvement
• Higher quality 29 31
• Less planting areas 21
• Lower costs
1960 1970 1991 1998 2008
Productivity (admt¹/ha/year)
Biotechnology
Classic improvement
11
5.5
100%
1980 2008
¹admt: air dried metric ton
14
15. Lands and forests
Own land (tsd ha)
State
Forests Total Planted
average
distance: São Paulo 89 49
74 Km BA and ES 216 125
Minas Gerais 57 22
Maranhão 197 40
Forests
average Conpacel¹ (SP) 51 36
distance: Total SPC³ 610 272
211 Km
Independent
- 92
Plants farmers3
Ports
Forests
Total preservation area:
¹ Conpacel: corresponds to 50% of former Ripasa’s areas. 252 tsd ha2
² Does not include infrastructure and available land for planting.
³ Does not include new sites announced, except for land acquired from Vale.
Suzano’s production is based on 100% renewable eucalyptus planted forests. Preserved native
forest area of approximately 40% of own land.
15
16. DNA Suzano: pioneering and innovation
Soil and climate conditions similar to Australia’s
facilitated the development of superior clones in
Brazil (innovation and R&D)
1980 1990 2000
16
17. New forest frontiers
North and Northeast: new expansion
frontiers in eucalyptus’ plantations in
Brazil. Suzano presents technological and
Planted forests still
positioning advantage.
represent a small part
of the available area in
Brazil.
Growth cycles
Last frontier: Semiarid (2010’s and
20’s): North and Northeast region
Source: IBGE,2007 1980’s and
90’s: ES
and South
Planted areas (MM ha)
BA
5.6 6.6 8.1
2000’s: Middle- 1960’s and 70’s:
west and farthest South and
South Southeast
regions
Source: BRACELPA / FAO / FBU
17
18. Forestry Business Unit priorities
Consolidate Explore new
business Focus on cost Long term view
operations in
opportunities reductions, in research and
the Northeast
related to the wood logistics development and
region: states
forestry base and operational forestry
of Maranhão
and Suzano’s excellence technology
and Piauí
competences
18
20. Overview of the pulp and paper production chain
51% 185
Minerals
8%
391 8% 362 Recycled
Global production of 8%
paper and Total fiber needed 49% 177
paperboard
Virgin fiber
391 28% 50 72% 127
Printing and Writing
Market pulp Integrated pulp
(13% of total fibers)
Paperboard
Million Tons
Tissue
Production 2008 (MM ton)
Corrugated
Newsprint
Others Market pulp still represents the smaller part of the fiber used for
paper production.
New paper capacities are being installed near to consumer markets,
while cash cost drives implementation of new pulp capacities.
Source: Poyry, 2008
20
21. Pulp demand growth drivers
Global paper demand growth (2008-15) of 2.2% per year: Chinese and Latin
American markets, including Brazil, outperform global growth rate.
Paper demand growth (2008-15)
391
Printing and Writing
Million Tons
Paperboard
Tissue
Corrugated
Newsprint
Others
Annual growth per paper segment
P&W 1.8%
P&W: printing and writing Tissue 3.2%
Source: Poyry, 2008
21
22. Global pulp demand
Eucalyptus pulp demand increases 3.6% per year (2008-13),
or 2.6 million tons in the period
Actual Forecast % p.y. Var. Kton
MM ton
2008 2009 2010 2011 2012 2013 2008-13 2008-13
Total BKP
21,250 19,640 19,930 20,195 20,195 20,220 -1.0% -1,030
softwood
Total BKP
23,673 22,475 23,825 24,710 25,135 25,375 1.4% 1,702
hardwood
Eucalyptus 13,241 14,095 14,795 15,090 15,430 15,805 3.6% 2,564
Sulphite 780 655 550 525 525 525 -7.6% -255
Total bleached
45,703 42,770 44,305 45,430 45,855 46,120 0.2% 417
pulp
Increase in global production capacity in the period is limited due to projects’ cancellations and suspensions.
Source: Hawkins Wright, July/ 09
22
23. Brazilian pulp cash cost: structurally low
US$ / ton (CIF/ North Europe)
US$ 490 - 630 / t
650
US$ 450 - 540 / t
550
Canada (British Columbia)
450
US$ 300 – 310 / t
Iberia, Norway e Sweden
Canada (East)
France and Belgium
West Europe
Finland
300
Canada
Finland
USA
Sweden
SUZ
USA
Indonesia
Chile
Brazil
Chile
Low Cost High Cost Low Cost High Cost
MM ton1 15.2 11.8 2.5 21.2
Hardwood Softwood
1Includesworld total production of market pulp, not only the highlighted countries.
Source: Hawkins Wright, July/ 09 - Volumes do not include production of unbleached pulp and high yield pulp.
23
24. Pulp Business Unit highlights
1,320 1,368
799
549 615 80% 88%
78%
84% 81%
16% 19% 22% 20% 12%
• Total production capacity of 2.6 million tons per year. Market pulp represents 1.8 million
tons.
• Sales of 1,368 Kton in 9M09
• Net revenue of R$ 1,198 million in 9M09
• 88% of total sales destined to exports: more than 40 countries, China being the main
destination
• Production cash cost: one of the lowest worldwide
• Organic growth projects increasing capacity by 4.3 million tons per year in the next years
24
25. Commercial approach
• Local presence in international markets: Asia, Europe and North America
• Technical support in each international office.
• Strong presence in China, with close market relationships and long term contracts
• FSC certified pulp
• More than 150 active clients
P&W: printing and writing 25
26. Pulp Business Unit priorities
Focus on Start up of the
operations: Local presence MA and PI
cost and in main global projects – new
logistics markets growth frontier
efficiency in Brazil
26
28. Global paper demand
456
391 398
Suzano’s
focus
• Global paper demand growth (2008-2015) of 2.2% per year:
– P&W: +1.8% p.y.
– Paperboard: +2.3 % p.y.
• Industry is still considered fragmented, but with significant regional concentration
• Emerging markets lead the supply and demand growth
P&W – Printing and writing / Paperboard includes Liquid paperboard
Source: Poyry – March, 2009
28
29. Demand growth drivers
Historically, there is a high correlation between GDP per capita and paper
consumption. In Brazil, the positive economic growth forecasts represent
an important driver for the domestic paper demand.
Paper consumption x GDP per capita
Consumption, kg per capita
350 Education
USA
300 Digital printing
250 Sweden Customized
Taiwan Japan
200 Korea, Rep.
media
150
100 UK Smart
China packaging
50 Spain
Brazil Electronic
0
0 5.000 10.000 15.000 20.000 25.000 30.000 35.000 40.000 45.000 media
GDP per capita, US$ Plastics
India = 7kg USA = 300kg
Source: Poyry, 2008
29
30. Brazil and Latin America: Suzano’s main markets
• Economic growth and increase in the
industrial activity
• Education level improvement and
access to new technologies
• The P&W and PB demand is
expected to grow at a rate of 4.1%,
from 2010 to 2014: outperforming
the capacity increase in the region
• Latin America: net importing region
• Competitive advantage: geographic
proximity, lower logistic costs and
shorter lead times
¹P&W: printing and writing / PB: paperboard and liquid paperboard
Source: RISI Latin America Forecast – August/09
30
31. Paper in Brazil
The markets in which Suzano
operates correspond to 31%
of total consumption, or
2.7 million tons.
Main seasonal factors in the domestic paper demand:
• Government purchases for textbooks
• Notebook exports
• Back to school season
• Year end holidays (packaging)
Paperboard does not include liquid paperboard
Source: Bracelpa – 2008
31
32. Paper Business in Suzano
More than 90% integrated production (pulp + paper)
• Fx hedge: approximately 60% of paper
revenue in local currency
• Hedge against the cyclicality of pulp prices
• Operational synergies: drying / repulping,
transport, taxes, environmental
infrastructure synergies
• Production capacity of 1.1 million ton
per year
• Approximately 400 clients, 300 in Brazil
• 5 productive plants
• 10 paper machines
• Strong brands: Report, Reciclato,
Paperfect and others
• 2 paper merchants
32
33. Paper Business Unit highlights
• Net revenue of R$ 1.7 billion in 9M09
• Brazil and Latin America represent approximately 70%¹ of total sales
• Profitability and risks define sales distribution in different regions
• Leadership in Printing & Writing and white paperboard in South America
• 2 own paper merchants – SPP NEMO (2nd largest in Brazil) and Stenfar (Argentina)
• Complementary graphic and consumption portfolio
1,140
1,071 1,098
916
794 37% 809
41% 43%
42% 51%
38%
62% 58% 63% 59% 57%
49%
¹Last 12 months until September/09
33
34. Paper Business Unit priorities
Portfolio
management, Regional Logistics and Discipline in
sales and regional leadership in the commercial growth
mix, focusing on main white paper approach opportunities
operational margin segments excellence assessments
and return
34
36. Results 9M09
Results 9M09 9M08 9M09/9M08
Sales volume (Kton) 2,176 1,850 17.6%
Paper sales – domestic market (Kton) 422 487 -13.6%
Pulp sales – exports (Kton) 1,180 811 45.6%
Net revenue - R$ Million 2,933 2,963 -1.0%
Net income - R$ Million 742 43 1,615.8%
EBITDA - R$ Million 766 1,087 -29.6%
EBITDA - US$ Million 367 644 -43.0%
EBITDA margin 26.1% 36.7% -10.6 p.p.
Average exchange rate (R$/US$) 2.09 1.69 23.6%
Net debt 4,019 4,775 -15.8%
Net debt / EBITDA (LTM) 3.5 3.7 n.a.
Note: Since 2008, contemplates the adjustments of Law 11.638/07
LTM – last twelve months
36
37. Net revenue and EBITDA
4,064
3,410
3,099 2,933
2,640 2,787 54%
42% 47%
49% 47% 59%
51% 53% 58% 53% 46%
41%
Note: the adjustments of Law 11.638/07 are contemplated since 2008.
37
38. Debt profile
Implementation
Start up of line
of Mucuri project
2 at Mucuri
(Line 2)
Acquisition
of Ripasa
Note: the adjustments of Law 11.638/07 are contemplated since 2008.
¹ Debt 31/09/09 and EBITDA of the last twelve months until September/2009
38
39. Debt amortization schedule
Adequate debt amortization schedule and liquidity profile:
• R$ 2.4 billion in cash (jun/09)
• Competitive debt costs
• Fitch affirms Suzano’s rating: AA- (bra) in May/09
178
Short term debt with renewal already agreed (R$178 million)
39
43. New growth cycle
Considering the new projects, pulp annual
capacity will increase 4.3 million tons and the New unit and
total installed capacity will reach 7.2 million Piauí Mucuri
tons per year. Maranhão Unit expansion
Unit
7,150
5,450
4,150
2,850 2,850 2,850 2,850
Mucuri Unit and new pulp line: analysis of the global economy and pulp market outlook
Definition on the new implementation schedule and start up dates until the end of 2009
1 The effective capacity will depend on the learning curves 43
44. Maranhão Unit
Necessary planted area: 133 tsd ha Final agreements with Vale in July
2009:
• Acquisition of Vale’s forestry assets in
Wood supply Maranhão: 84,5 thousand ha of land
(2013-2028) (34,5 thousand ha already planted)
• Acquisition of eucalyptus timber from the
Vale Florestar Program, starting in 2014
until 2028
• Technology cooperation agreement
• Railroad transportation for the pulp
output to the port region of São Luiz until
2043.
• Start up in 2013 ensured with Vale’s
forestry assets (planted forest) – on a
competitive basis
2009 to 2015 2011 to 2014
Forestry Capex US$ 200 Million Industrial Capex US$ 1,8 Billion
44
45. Piauí Unit
• Final agreement with
Necessary planted area: 160 tsd ha Transnordestina in July 2009:
Wood supply • Railroad transportation for the
(2015 onwards) pulp output from Piauí to the
port region of São Luiz until
2028
• Planting already started in MA
licensed area
• Start up of Piauí unit scheduled for
2014, ensured with 5.5 years old
forest
2009 to 2015 2012 to 2015
Forestry Capex US$ 370 Million Industrial Capex US$ 1,8 Billion
45
47. Key messages
Leading player in the regional paper market and one of the top
Leadership 10 market pulp producers
Competitiveness One of the lowest cash costs in the world
Vision Solid organic growth strategy
Consolidated management structure/model and alignment with
Management shareholders
Capital Disciplined capital structure management
structure
47
49. Experienced and active Board of Directors
DAVID FEFFER, 52 Experience of 35 years in the pulp and paper industry. CEO of Suzano Holding S/A and Chairman of the Board of Directors of Suzano
Pulp and Paper S/A. CEO of IPLF Holding. CEO and Vice President of the Board of Directors of Polpar S/A. Vice President of
Chairman Premesa S/A and Vocal.
Experience of 31 years in the pulp and paper industry. Member of Sustainability and Strategy Committee, Chairman of Polpar’s
DANIEL FEFFER, 49 Board of Directors, President of Premesa, Corporate VP of Suzano Holding, the IPLF Holding, President of Vocal, Chairman of
Vice Chairman Lazam-MDS Insurance Brokers and Administrator’s Board of Directors, Chairman of Ecofuturo Institute’s Board of Directors.
Experience of 34 years in the pulp and paper industry. Vice President FIESP. Member of ABRINQ and EMBRAER’s Board of
BORIS TABACOF, 81 Directors. Member of BRACELPA’s Advisory Board. Former member of the Association Committee of Foreign Trade of Brazil and
Vice Chairman Chairperson of the Advisory Committee on Paper and Wood Products of Food and Agriculture UN organization in Rome.
Experience of 30 years in the pulp and paper industry. Member of the Board and the Committee of Sustainability and Strategy;
JORGE FEFFER, 48 Director of Premesa, Corporate VP of Suzano Holding, a member of Lazam MDS Insurance Brokers and Administrator’s Board of
Directors and VP and Director of the Council of Ecofuturo Institute.
Coordinator of Sustainability and Strategy Committee and member of Audit Committee and member of the Compensation
Commission of the Board of Directors; Former president of the board and CEO of Hoechst of Brazil and senior executive of Hoechst
CLÁUDIO SONDER, 67 AG, Frankfurt. Member of RBS Group’s Board of Directors, of Cyrela Brazil Realty, of OGX, of Chemical Group DSM/Holanda,
President of Renner Stores’ Board of Directors.
Senior partner of Machado, Meyer, and Sendacz Opice Lawyers and Director of OAB, Brazil. President of CESA.Former Legal
ANTONIO MEYER, 63 Adviser and Chairman of the Legislative Committee of the American Chamber of Commerce and Director of ABRASCA’s Legislative
Committee. Former Justice Secretary for the State of São Paulo. (Independent)
Senior partner of Integra Associates. Member of Gerdau SA’s Board of Directors, Gerdau Metallurgical, Satipel Industrial SA, RBS
Group, Sao Paulo Alpargatas, Locates, Delphi Corporation (USA) and Johnson Electric (Hong Kong); Board Member of Brazil's
OSCAR BERNARDES, 63 Bunge, Brazil and Alcoa Veirano Assoc. Oscar was President of Bunge International and managing partner in Booz-Allen & Hamilton.
(Independent)
Coordinator of Suzano Pulp and Paper’s Audit Committee. Former General Manager of WTORRE and President of TAM Airlines.
MARCO BOLOGNA, 54 Member of TAM and Daycoval Bank Board of Directors. (Independent)
Chairman of Board of Directors of Perdigão. Board member of WEG SA, Ultrapar Participações SA and Iochpe-Maxion SA. Former
NILDEMAR SECCHES, 60 Director of the National Bank for Economic and Social Development - BNDES, and General Director of Corporate Group Iochpe-
Maxion Industrial Holding. (Independent)
49
50. Distinguished management team
Chief Executive Officer, 3 years at Suzano. Board of Directors’ Member of Archer Daniels Midland Company – ADM and of Marfrig.
ANTONIO MACIEL BRACELPA’s VP. Former Board of Directors’ member of SEBRAE, Gradiente, Crecisa and Amcham. Former chaiman of Ford Brasil
NETO, 51 and Ford Latin America, Itamarati Group, Ferronorte and Cecrisa and Executive of Petrobrás and of the Federal Government.
Mechanical Engineer graduated at UFRJ.
Pulp Business Unit Executive Officer, joined Suzano in 2009. Former CEO of European operations of RGM Group and
ALEXANDRE commercial director of Aracruz. Graduated in Business Administration at Fundação Getúlio Vargas.
YAMBANIS, 57
Chief Financial Officer, responsible for Legal, 14 years at Suzano. Has worked at pulp and paper sector for 29 years. Former
BERNARDO Director, Executive Vice-President and member of the Board of Directors of Vale. PhD in Business Administration graduated at
SZPIGEL, 63 University of California, Berkeley.
Strategy, Corporate Development and Investor Relations Executive Officer, 6 years at Suzano. Former Paper Business Unit
Executive Officer (2005-08). Former Executive of JPMorgan in Brazil and NY (Investment Banking Global and Latin America),
ANDRÉ DORF, 36 Chase Manhattan and Banco Patrimônio/Salomon Brothers. Graduated in Business Administration at FGV.
Chief Operation Officer, 5 years at Suzano. Has worked as Expansion Project Director of Mucuri Unit. Former executive of Dow
ERNESTO Chemical Company, in Brazil, USA and Europe. Post-Graduated in Business Administration at FIA/USP.
POUSADA, 41
Forest Business Unit Executive Officer, 2 years at Suzano. Former executive of Champion Pulp and Paper and International Paper
JOÃO COMÉRIO, 44 in Brazil and USA. Post graduated in Forest Science and Wood Technology at USP – Piracicaba.
Paper Business Unit Executive Officer, 6 years at Suzano. Former Executive Manager of Suzano’s Pulp Business Unit and Sales
General Manager for Latin America at General Electric, at the Industrial Systems Division. MBA degree at Ibmec São Paulo.
CARLOS ANIBAL, 39
Human Resources Area Executive Officer, joined Suzano in 2008. Former Human Resources Manager of Operations in General
Electric in Brazil and abroad, Global HR Director for Information Technology in the United States and HR Director for Mexico and
CARLOS GRINER, 45 Latin America. Former Executive of Carioca Engenharia, CR Almeida, and Bureau Veritas. Post Graduated in Business
Administration at COPPEAD.
50
